#10154

Thanks for the question.

As you refer to, it is not your role as auditor to comment on the viability of the investment in Digital or Broadcasting licences.

It is noted that this particular investment (almost 100% of the fund’s assets) has been expressly contemplated in the fund’s investment strategy.

It is also noted that trustees have provided a basis upon which the historical cost is still considered to be reflective of market value.

Perhaps the Management Letter could make reference to the continuing need for the trustee of a superannuation fund to ensure that assets are valued at their market value at the end of each income year as per Regulation 8.02B and section 35B(2) of the SIS Act.

Once the “full launch” of the applications has occurred, presumably the “unrestricted refund” feature ceases.

So, it is assumed that valuing these investments is more problematic once full launch has occurred.

It is assumed that the fund’s members are not likely to commence a pension any time soon (there would be obvious liquidity issues if this was to occur).

It would be interesting to see if other auditors have thoughts as to whether anything else should also be referred to in the Management Letter to the trustees of a fund with this type of investment.

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