The Australian Taxation Office has announced new accounting requirements for SMSFs, which will come into effect 1 July 2021.
New accounting standard AASB 2020-2 has been released by the Australian Accounting Standards Board (AASB) and will come into effect from 1 July 2021.
The ATO said it will change the reporting requirements of certain for-profit private sector entities which will no longer be able to self-assess financial reporting requirements and prepare special purpose financial statements (SPFS) if their trust deeds were created or amended on or after 1 July 2021.
The new standard will also require preparation of financial statements that comply with Australian Accounting Standards (AAS).
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"These entities will now need to prepare, as a minimum, Tier 2 general purpose financial statements (GPFS) that comply with all recognition and measurement requirements in AAS and minimum simplified disclosures," the ATO said.
"This change means new SMSFs that are set up after 1 July 2021 and wish to prepare SPFS will need to ensure they don't have a clause in their trust deeds that require their financial statements be prepared in accordance with the AAS."
Additionally, the ATP said existing SMFSs that intend to change their trust deed after 1 July 2021 should remove such a clause if they wish to continue preparing SPFS.
"Most SMSF trust deeds refer to the financial statements being prepared in accordance with the super laws and do not refer to the AAS so this should not become an issue for the majority of SMSFs," the taxation office said.
"The AASB have published a key facts document which explains the impacts of AASB 2020-2 and this will assist the industry navigate any impacts of the new financial reporting requirements."