Self-managed super fund (SMSF) financial statements can look complex at first glance. However, once you understand what each section is showing, they become a valuable tool for confirming your fund is compliant, accurately reported, and operating as intended.
For trustees, financial statements are more than an annual formality. They underpin your SMSF tax return, support the independent audit, and provide a clear snapshot of your fund’s financial position at year end. Understanding the basics helps you ask the right questions and maintain confidence in how your SMSF is being managed.
In short:
- Well-prepared financial statements reduce audit delays and compliance risk.
- SMSF financial statements summarise your fund’s assets, liabilities, income and member balances for the financial year.
- They form the basis of your SMSF tax return, audit and regulatory reporting.
- Trustees do not need accounting expertise, but should understand the high-level structure and review key figures for accuracy.
Key Components of SMSF Financial Statements
Statement of Financial Position (Balance Sheet)
This shows the fund’s financial position at 30 June and includes:
- Assets – such as cash, term deposits, listed shares, managed funds, property and other investments
- Liabilities – expenses payable, tax liabilities, borrowings (if applicable)
- Net assets – representing the total value attributable to members
Trustees should check that all investments are correctly listed, asset values appear reasonable and consistent with supporting records, and any liabilities are clearly explained.
Operating Statement (Income Statement)
The operating statement summarises the fund’s financial activity for the year, including:
- Investment income (dividends, interest, distributions)
- Capital gains or losses
- Contributions received
- Fund expenses
- Income tax and franking credits
This statement helps trustees understand where the fund’s income was generated, how expenses are tracking year to year, and whether taxable income has been calculated correctly.
Member Statements
Member statements provide a detailed view of how each member’s balance has changed over the year, including the following:
- Opening and closing balances
- Contributions
- Pension payments (if applicable)
- Allocated earnings
- Rollovers and benefit payments
For trustees with both accumulation and pension interests, this section is particularly important to ensure balances are allocated correctly and pension accounts are reported accurately.
Notes to the Financial Statements
The notes provide context and explanation behind the numbers. They outline:
- Accounting policies applied
- Investment valuation methods
- Pension and accumulation account disclosures
- Compliance and related-party disclosures
While often overlooked, the notes are critical for audit purposes and provide transparency around how the figures were prepared.
Why Financial Statements Matter for Compliance
SMSF financial statements are not simply informational. They are relied upon by:
- Your SMSF auditor
- The ATO
- Your tax agent
Errors or omissions can lead to audit delays, requests for additional documentation, compliance breaches, or increased ATO scrutiny.
Accurate financial statements help ensure your fund meets its obligations under superannuation law and avoids unnecessary regulatory issues.
Common Areas Trustees Should Pay Attention To
While trustees are not expected to prepare the accounts themselves, it is helpful to review whether investment balances match your records, contributions and pensions appear reasonable, significant year-on-year changes are explained, and any pension commencements or commutations are reflected correctly.
If something doesn’t look right, it’s best to raise questions early – before the audit and lodgement process begins.
How Professional SMSF Accounting Helps
SMSF financial statements rely on correct data, accurate classifications, and a clear understanding of superannuation rules. Professional SMSF accountants help ensure transactions are recorded correctly throughout the year, financial statements align with tax and audit requirements, pension and member balances are calculated accurately, and supporting documentation is audit-ready.
This reduces compliance risk and provides trustees with confidence that their fund’s reporting is accurate and complete.
Final Thoughts
Understanding your SMSF financial statements doesn’t require SMSF accounting expertise. A high-level review helps trustees stay informed, ask the right questions, and maintain oversight of their fund’s compliance and performance.
When prepared correctly, financial statements are not just a compliance requirement – they are a valuable summary of how your SMSF is tracking year to year.
SMSF Financial Statements FAQs
Are SMSF financial statements the same as the SMSF tax return?
No. SMSF financial statements and the SMSF annual return are separate documents. The financial statements set out the fund’s accounting records for the year, including assets, liabilities, income and member balances. These statements are used by the independent auditor and form the basis for preparing the SMSF annual return, which is lodged with the ATO.
Who prepares SMSF financial statements?
SMSF financial statements are typically prepared by a specialist SMSF accountant.
The accountant uses the fund’s records, investment data and supporting documentation to ensure the accounts are accurate, compliant and suitable for audit and tax reporting. Trustees remain responsible for the fund but are not expected to prepare the statements themselves.
What happens if there are errors in SMSF financial statements?
Errors can lead to audit delays, requests for amendments, or additional compliance work.
In some cases, incorrect reporting may result in ATO queries or compliance issues. Reviewing financial statements early and addressing any concerns before audit and lodgement helps reduce these risks and avoids unnecessary delays.
Disclaimer: This article contains general information only and does not take into account your personal objectives, financial situation, or needs. It is not a substitute for financial, taxation, or legal advice. While care has been taken to ensure the information is accurate at the time of publication, superannuation and tax laws are complex, can change, and apply differently depending on individual circumstances. SMSFs are subject to strict compliance requirements, and mistakes can result in penalties or additional tax. You should seek advice from a suitably qualified and registered professional before acting on this information.
