Adviser updates

SMSF Member Balances

Monday August 25, 2008 - Please be advised that development work is currently underway to upgrade SMSF Provisional Member Balance Reporting.

The report will be changed to enable APA to calculate the new financial years� SMSF opening balance, and also report the ongoing balances at any point in time, going forward.

In order to achieve this, we need the following:

opening member balances for your SMSF clients as at 1 July 2007 (where that information has not already been provided);
detail of any subsequent transactions which have not previously been provided.

If this information is not made available, the balances shown as brought forward on 1 July 2008 in the new report will be incorrect.

Most of this information can be provided via the ADE system, however to aid understanding please see the detail below.

This new development has arisen as a result of feedback from advisers, and we believe it will be a valuable aid when reviewing your clients� financial position, however it is dependent upon the accurate and prompt provision of the information referred to above.

SMSF Provisional Member Balance Report

The SMSF Provisional Member Balance report provides a provisional balance for each member of the fund, including a notional growth
movement arising during both the current and previous financial year. The apportionment of the portfolio growth is based upon the ratio of each member�s interest�s balance to the total portfolio value, at the date the report is run in respect of current year growth and at the preceding 30 June in respect of the previous years� growth.

The member balances reflected in the report are unaudited and are reliant upon accurate opening member balance and subsequent transaction detail having been provided to the administrator.

The methodology applied in apportionin growth is explained further below and is unlikely to be consistent with the final growth allocation applied. The information contained in the report is provided as an indication of current member balances only, as a value added tool to enable advisers/investors to monitor member balances during the financial year. Detailed transaction reports are available to facilitate review of the above entries.

The methodology applied to apportionment of the portfolio growth for the period is such that portfolio growth is apportioned in relation to member balances as at the date the report is run, prior to growth being applied. To the extent that the previous years' growth has also been allocated by the administrator, the proportions relevant as at the end of the previous financial year will have been applied.

This methodology is unlikely to be consistent with the final audited allocation of growth for the financial year in question, and in particular will be subject to significant distortion where material transactions (large contributions or withdrawals) are made intra-year.

The following transactions affect the SMSF Provisional Member Balance, and can be entered via the Adviser Data Entry (ADE) facility

SMSF Contributions