There are two valuation issues, especially for 2020.

• Has the value of SMSF assets changed significantly since the last valuation due to COVID-19?
  The ATO has reminded SMSFs that, generally, SMSF assets must be valued to market every year.
  A formal valuation of real estate by a registered valuer is not required every year, but trustees should obtain a new valuation from a registered valuer if it has become materially inaccurate or it has been affected by an event such as COVID-19. Appraisals from a real estate agent can be acceptable with other evidence, and must include details of comparable sales.
  Valuations should provide market value 'as close as possible to 30 June'.
  If SMSFs do not provide their auditors with 'sufficient appropriate evidence' to substantiate the values of the SMSF assets, they must consider qualifying their opinion and lodging an Auditor Contravention Report (ACR).
• Evidence of the value of assets cannot be obtained due to COVID-19
  Where 'sufficient appropriate evidence' cannot be obtained due to a situation such as COVID-19, auditors must still consider a qualification and ACR, and include the reasons why the trustee could not obtain satisfactory evidence.
  Where that is as a result of COVID-19, it will not lead to penalties from the ATO.
  This means that SMSFs who cannot provide the evidence must give their auditors details of what steps they have taken to obtain the evidence and why they were unsuccessful.

The valuation of SMSF assets will concern SMSF auditors in 2020 even more than before. It is important for SMSFs to have their evidence and documentation to survive the audit process unscathed (especially where it has been unable to obtain that evidence due to COVID-19).