The ATO said this 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 and require preparation of financial statements that comply with the Australian Accounting Standards (AAS).

It also means that 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.

“Similarly, existing SMSFs that intend to change their trust deed after 1 July 2021 should remove such a clause if they wish to continue preparing SPFS,” the Tax Office said.

“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.”