I am currently auditing a fund I also audited last year.
It had a large tract of farmland which was sold to developers to be subdivided and paid for over a period of 10 years.
The accountant has been resistant to getting a valuation of remaining farmland as he felt the "once every 3 year rule" still applies.
Establishing which portion of land was still owned by the fund and what was in the hands of the developer was a little murky in 2019 as new titles were being produced around that time.
The trustees signed a representation letter confirming they believed the remaining property value was correct at approximately 1 million for the 2019 year. I noted in my management letter that the farmland value had not changed for sometime and suggested a revaluation.
This year, they have included comparison values with properties close by, and decided that the remaining property is now worth around 4 million. 4 million is more likely accurate based on the new titles received. So I assume I should qualify financials, based on the fact that the opening balances were radically out?
This years financials appear accurate otherwise. Is a contravention required?
The trustees also receive 500k per year as the payment from the developer. This income is included on the financials as income, but not listed on the tax return. Members have both pension and accumulation accounts, so it was my understanding that the capital gain would not be entirely exempt in this case?
Both trustee accumulation accounts and pension accounts now exceed the transfer balance cap.
Any input would be much appreciated.