Reporting Form SRF 230.0

Transactions with Associated Parties

Instruction Guide

Completion of SRF 230.0 Transactions with Related Parties

This form must be completed on an annual basis by all trustees of APRA-regulated superannuation entities, excluding Small APRA Funds (SAFs) and Single Member Approved Deposit Funds (SMADFs). With the exception of SAFs and SMADFs, there are no exemptions for any type of APRA–regulated superannuation entity.

If a superannuation entity has no items to disclose, the form can be left blank as D2A recognises blanks as zeros; however it is still required to be submitted as part of the annual return.

Note: All forms included in the SRF 200 series should be submitted together as an annual return, not individually as separate forms.

Purpose

This form collects information on transactions with associated parties of the reporting superannuation entity. Information on this form is prudentially important, as it forms part of APRA’s monitoring and analysis framework for superannuation entities and the industry.

This Guide has been prepared to assist in the completion and lodgement of SRF 230.0 Transactions with Associated Parties. For ease of use, the Guide has been split into three main sections as follows:

• Lodgement and validation of and changes to SRF 230.0 Transactions with Associated Parties;
• General guidance – this guidance provides principles that should be applied to all items throughout SRF 230.0 Transactions with Associated Parties; and
• Instruction guide for specific items – this guidance should be applied to the specific items which relate to each superannuation entity.

Lodgement and validation of SRF 230.0 Transactions with Associated Parties

Lodgement and authentication codes

This form must be completed and lodged to APRA by a corporate or natural ‘person’ (trustee director or administrator), and not by the superannuation entity as the entity is not a ‘person’.

Once SRF 230.0 Transactions with Associated Parties has been completed and submitted to APRA, an authentication code is generated in D2A from information entered into the form. The authentication code and date submitted appear in the footer of each page of the return (‘return’ equates to all 9 forms). Any change of information entered or resubmission of the return will result in a change to the authentication code. The authentication codes and date submitted should be used by auditors to determine that the four forms audited (SRF 200.0 Statement of Financial Performance, SRF 210.0 Statement of Financial Position, SRF 220.0 Exposure Concentrations and SRF 230.0 Transactions with Associated Parties) have been submitted.

The same authentication code on all the forms lodged will give trustees some 'comfort' that their attestations on SRF 260.0 Trustee Statement relate to the other forms submitted as the return. Different authentication codes should be taken by trustees that their attestations are not consistent with other forms and APRA may take the view that the return has therefore not been signed and authorised by the trustee.

A receipt indicating successful lodgement of the return will be provided via email. There may be a slight delay in a receipt being provided if the submission is made in the last week of October. Do not resubmit your return however, as the receipt will be generated.

Validation and calculation of totals

When data is entered into the form, the total balances (in the greyed out cells) will not be calculated automatically. The total items will only calculate when the form is validated. Clicking on the word 'validate' in the top left hand corner of the screen and selecting ‘OK’ will result in the total items being calculated and the validation rules appearing for review.

There are three types of validation rules as follows:

1. Warnings: Confirmation rules – this rule requires the user to provide confirmation that the data entered into an item is correct, for example that a negative number is correct and should not be positive. To provide confirmation the user should click the confirm box and provide a brief description in support of the item.

Note: Descriptions entered for warnings may not always appear if the return is validated more than once. There is no need to re-enter the description as D2A has saved this description and the comments will be lodged with the return.

2. Error: Mandatory rules – this indicates an error in an item, for example a description and a value must be included in a table. These errors must be corrected before the return can be lodged.

3. Cross form validations – this also indicates an error and must be corrected before the return can be lodged, for example Totals disclosed in SRF 210.1 Selected Disclosure of Investments must agree with the investments reported in item 3 ‘Investments’ on SRF 210.0 Statement of Financial Position.

Changes to SRF 230.0 Transactions with Related Entities

As detailed above, any change of information entered or resubmission of the return will result in a change to the authentication code. SRF 230.0 Transactions with Associated Parties is one of the four forms which requires audit, with a copy of the audit report being provided to APRA together with the annual return. If an amendment is made to the return after the audit report relating to the return has been submitted to APRA, then a copy of the amended return must be:

• Lodged with APRA; and
• Forwarded to the auditor of the return. The auditor will then consider the magnitude and significance of the amendment to the returns in order to assess whether the audit report will have to be re-issued.

General guidance for completion of SRF 230.0 Transactions with Associated Parties

Important!

Report all disclosures rounded to the nearest thousand dollars. Do not use decimal numbers i.e. when dividing the value to obtain a rounded balance to the nearest thousand dollars, ensure that the figure is whole.

Important!

There is no materiality limit applied to the disclosure of amounts within SRF 230.0 Transactions with Associated Parties as ‘Transactions with Associated Parties’ are material by their nature. All balances must be recorded. Amounts cannot be omitted based on materiality levels. Each superannuation entity should use its own judgement in grouping items into meaningful categories (where applicable).

Important!

Zeros are not required where there is no dollar value for an item. If there is no balance for an item, leave it blank, as D2A recognises blanks as zeros.

Contribution revenue and benefit payments

Exclude all contribution revenue and benefit payments from SRF 230.0 Transactions with Associated Parties. APRA views these transactions as 'at arms length' and in the ordinary course of business operations for all superannuation entities and, consequently, these transactions should not be reported.

In addition, the following disclosures are not required:

• Individual listings of Trustee contributions made to, and benefit payments received from, the superannuation entity; and
• Individual listings of contributions from employer sponsors.

It is not APRA’s intention to drill down into the normal transactions of a superannuation entity which have already been reported in SRF 200.0 Statement of Financial Performance and SRF 210.0 Statement of Financial Position of the annual APRA return.

Aggregation of transactions

Transactions may be aggregated for the purposes of reporting on this form only where they occurred during the same reporting period, and where the counterparty, relationship, and the other characteristics of the transactions (as listed for this form) are the same.

For example, total balances (as opposed to individual transactions) can be reported for acquisition costs and disposal proceeds where the counterparty, relationship, asset class and type are the same. If the ABN is available this should be reported and should be the same for all investments included in the aggregate.

Specific definitions

Note: Guidance on what constitutes an “associated party” is included at column (2) ‘Relationship’ later in this document.

1. Party/entity

A party is an entity according to the current Australian Accounting Standard relating to consolidated accounts. “Entity” is defined to mean any legal, administrative, or fiduciary arrangement, organisational structure, or other party (including a person) having the capacity to deploy scarce resources in order to achieve objectives.

2. Associate

Is defined in accordance with the definition provided in the current Australian Accounting Standard relating to investments in associates as meaning an investee not being a:

(a) subsidiary of the investor; or

(b) partnership of the investor; or

(c) investment acquired and held exclusively with a view to its disposal in the near future

over which the investor has significant influence.

Significant influence is defined in accordance with the definition provided in the current Australian Accounting Standard relating to investments in associates as significant influence as the power to participate in the financial and operating policy decisions of the investee but not to control those policies.

For reference, a standard list of associated entities is included in the drop-down box in SRF 230.0 Transactions with Associated Parties under all items, column (2). There are 11 standard associated entity relationships and each of these is described in the instruction guide for specific items (below).

3. Joint venture

Is defined in accordance with the current Australian Accounting Standard relating to joint ventures, as meaning a contractual arrangement whereby two or more parties undertake an economic activity, which is subject to joint control. A joint venture may take the form of the following:

A joint venture entity.

Means a joint venture that is in the form of an entity and does not include an entity that:

(a) is acquired and held exclusively with a view to its disposal in the near future.

(b) operates under severe long-term restrictions that impair significantly its ability to make distributions to the venturer.

A joint venture operation.

Means a joint venture that is not in the form of a joint venture entity and it does not include an entity that:

(a) is acquired and held exclusively with a view to its disposal in the near future.

(b) operates under severe long-term restrictions that impair significantly its ability to make distributions to the venturer.

4. Parent entity

Is defined by the current Australian Accounting Standard relating to consolidated accounts as meaning an entity that controls another entity. “Entity” is defined to mean any legal, administrative, or fiduciary arrangement, organisational structure, or other party (including a person) having the capacity to deploy scarce resources in order to achieve objectives.

5. Subsidiary

Is defined in accordance with the definition provided in the current Australian Accounting Standard relating to consolidated accounts as, “an entity that is controlled by a parent entity”.

Control is defined by the current Australian Accounting Standard relating to consolidated accounts as the capacity of an entity to dominate decision-making, directly or indirectly, in relation to the financial and operating policies of another entity so as to enable that other entity to operate with it in pursuing the objectives of the controlling entity.

Capacity is defined by the current Australian Accounting Standard relating to consolidated accounts as meaning ability or power, whether direct or indirect, and includes ability or power that is presently exercisable as a result of, by means of, in breach of, or by revocation of, any of or any combination of the following:

(a) trusts;

(b) relevant agreements; and

(c) practices

whether or not enforceable.

6. Approved trustee

For the purposes of this form, an “approved trustee” is any trustee of an APRA-regulated superannuation entity that is a corporation. It includes (but is not limited to) any corporate trustee, including a corporate trustee approved by APRA (where the Regulator must be satisfied that it can be relied on to perform the duties of trustee in a proper manner and which satisfies minimum liquidity/financial requirements). It does not include a group of individual trustees.

Instruction guide for specific items

The instruction guide for specific items contains four items, in accordance with the format of SRF 230.0 Transactions with Associated Parties:

1. Investment/asset acquired
2. Liabilities/contingencies/obligations
3. Income
4. Expense/benefit payments

Columns (1) to (3) which appear under all four items are below:

(1) Counterparty

Detail the name of the other party to the transaction.

(2) Relationship

The drop down box lists the potential types of relationships that may exist between the reporting superannuation entity and the other parties involved in the transaction. Select the most appropriate one.

For example, industry superannuation entities should report all transactions with a member related business/entity (i.e. where a member is a director of a company doing business with the superannuation entity) in the drop-down box under column (2) section 10 ‘Member related business/entity’.

Interpretations of the list of relationships specified in the form are provided below:

Section 1. Trustee of the entity

This refers to those superannuation entities where the trustees are individuals rather than a corporate trustee. This selection will be applicable where there have been transactions between the reporting superannuation entity and a Trustee and/or the spouse of a Trustee of the reporting superannuation entity.

Section 2. Related entity of the trustee of the entity

This refers to those superannuation entities where the trustees are individuals rather than a corporate trustee. This selection will be applicable where there have been transactions between the reporting superannuation entity and a business or entity that is related to a Trustee of the reporting superannuation entity. A business or entity that is related to a Trustee is to be interpreted as including:

• The trustee of the superannuation entity is a director of that entity/business;
• The spouse of a trustee of the superannuation entity is a director of that entity/business; and
• The trustee of the superannuation entity is an employee of that entity/business.

Section 3. Approved trustee of the reporting entity

This refers to where the trustee of the superannuation entity is a corporate trustee. This selection will be applicable where there have been transactions between the reporting superannuation entity and the corporate Trustee of the reporting superannuation entity.

Section 4. Trustee/Director of the approved trustee

This refers to those superannuation entities where the trustee is a corporate trustee. This selection will be applicable where there have been transactions between the reporting superannuation entity and individual directors (and/or those directors’ spouses) of the corporate Trustee of the reporting superannuation entity.

Section 5. Employee/contractor/consultant of the approved trustee

This refers to those superannuation entities where the trustee is a corporate trustee. This selection will be applicable where there have been transactions between the reporting superannuation entity and any individual employees or contractors or consultants of the corporate Trustee of the reporting superannuation entity.

Section 6. Trustee/Director of a group entity of the approved trustee

This refers to those superannuation entities where the trustee is a corporate trustee. This selection will be applicable where there have been transactions between the reporting superannuation entity and directors of an entity that is part of the consolidated group economic entity of which the approved trustee forms a part. This will include directors of the following group entities:

• Directors of the parent entity(s) of the approved trustee;
• Directors of subsidiaries of the parent entity of the approved trustee;
• Directors of subsidiaries of the approved trustee;
• Directors of joint ventures or associates of the approved trustee; and
• Directors of other entities in the trustee’s group.

Section 7. A related entity of the Director/Trustee of the entity that is not a group entity of the approved trustee

This refers to those superannuation entities where the trustee is a corporate trustee. This selection will be applicable where there have been transactions between the reporting superannuation entity and an entity that is related to a director of the corporate trustee of the reporting superannuation entity, but that entity is NOT part of the consolidated group economic entity to which the approved trustee belongs i.e. this does not include entities that are listed in section 8.

An entity that is related to a Trustee or a director of the corporate trustee of the reporting superannuation entity is to be interpreted as including:

• A director of the corporate trustee of the reporting superannuation entity, is a director of that entity/business; and
• The spouse of a director of the corporate trustee of the reporting superannuation entity, is a director of that entity/business.

Section 8. Other group entities of the approved trustee

This refers to those superannuation entities where the trustee is a corporate trustee. This selection will be applicable where there have been transactions between the reporting superannuation entity and an entity that is part of the consolidated group economic entity to which the approved trustee belongs. This will include the following group entities:

• The parent entity(s) of the approved trustee;
• Controlled entities of the parent entity(s) of the approved trustee; and
• Joint ventures or associates of the parent entity(s) of the approved trustee.

Section 9. Subsidiary, associate or joint venture of the entity

This selection will be applicable where there have been transactions between the reporting superannuation entity and any subsidiaries, associates or joint ventures of the reporting superannuation entity. This includes:

• Controlled entities of the approved trustee; and
• Joint ventures or associates of the approved trustee.

Section 10. Member related business/entity

This selection will be applicable where there have been transactions between the reporting superannuation entity and a business or entity that is related to a member of the reporting superannuation entity (where this is known). A business or entity that is related to a member of the reporting superannuation entity is to be interpreted as including:

• The member of the superannuation entity is a director of that entity/business.

Section 11. Other

This section will be applicable where any of the above selections are not appropriate.

(3) ABN

Provide the ABN of the associated party where applicable.

Completion of the ABN fields is not mandatory to lodge returns. If the ABN is not recorded in the superannuation entities’ system, or is not known, leave the ABN blank. A Warning confirmation validation rule in D2A will request confirmation that the investment entity has not applied for an ABN. Tick the box as confirmation and enter the comment that ABN is not known.

Item 1. Investment/asset acquired

If the transaction with the party selected under “(2) Relationship” above involved the acquisition/disposal of an investment/asset, then this column is required to be completed where appropriate. If an acquisition/disposal transaction did not occur in the current reporting period/financial year, then item 1 must be left blank.

If the transaction with the party involved the recognition or extinguishment of an asset (that is recognised on balance sheet or off-balance sheet), then this column is required to be completed where appropriate.

Columns (4) to (9), relating to item 1, are below:

(4) Type

Select from the drop down box:

On-balance sheet exposures

On-Balance sheet exposures relate to those assets or rights recognised on-balance sheet (i.e. recorded on the face of the balance sheet or statement of financial position). For these exposures record the net market value.

Off-balance sheet exposures

Off-Balance sheet exposures relate to those assets or rights that do not satisfy the recognition requirements of the current Australian Accounting Standards and are therefore not recognised on-balance sheet (i.e. not recorded on the face of the balance sheet or statement of financial position). These transactions may include transactions such as performance-related rights, and guarantees, whether revocable or not.

(5) Asset class

Select the appropriate asset class type from the drop down list provided. This list should follow the main asset class heading in the Statement of Financial Position.

(6) Acquisition cost

Acquisition costs must only be recorded in SRF 230.0 Transactions with Associated Parties item 1, column (6) if the acquisition has been made in the current reporting period/financial year. Any acquisitions made prior to the start of the current reporting period/financial year must not be disclosed.

Record the original cost paid to acquire the asset, at the date the asset was initially acquired in the current financial year by the superannuation entity. Where the asset was acquired in stages, sum the initial acquisition cost of each stage which occurred in the current financial year only.

Acquisition cost is not the current net market value/fair value of that asset.

Important!

As detailed under the general instructions, transactions may be aggregated for the purposes of reporting acquisition costs and disposal proceeds, but only where they occurred during the same reporting period, and where the counterparty, relationship, and the other characteristics of the transactions are the same.

Important!

If a superannuation entity recognises a bank as a related entity, the entity should not report amounts received in the bank account as acquisitions and amounts paid as disposals. Instead the net movement for the year should be reported as an acquisition in column (6) (where the movement is positive) or as a disposal in column (7) (where the net movement is negative). The fair value at the balance date disclosed in column (9) should be the closing balance of the bank account.

(7) Disposal proceeds

Where applicable, record the proceeds received or receivable on the disposal of the asset. Disposal proceeds must only be recorded in SRF 230.0 Transactions with Associated Parties item 1, column (7) if the disposal has been made in the current reporting period/financial year. Any disposals made prior to the start of the current reporting period/financial year must not be disclosed.

Refer details under column (6) above.

(8) Net transactions

Represents the aggregate net value of all transactions involving the acquisition/disposal of investments/assets during the period, between the superannuation entity and that particular related party.

(9) Fair value at balance date

Where the investment or asset is held by the superannuation entity as at end of the financial year, record the net market or net fair value of the investment or asset as at balance date.

Note: If this figure is $Nil at year end, a confirmation box will appear on validating the form. Tick the confirmation box, and input an explanation of the reason for this (e.g. “asset disposed of during the year”) in the box provided. The form can then be submitted.

Important!

If a superannuation entity has a related party investment at the financial year end, but there have been $nil acquisitions or disposals during the current financial year in relation to this investment, the fair value of the related party investment assets at the financial year end should not be reported in column (9) ‘Fair Value at Balance Date’.

However, the change in net market value of the related party investment should be reported in SRF 230.0 Transactions with Associated Parties item 3 ‘Income’, under column (4) ‘Type’ as ‘change in net market value realised or unrealised gains/losses’ selected from the drop-down box.

Item 2. Liabilities/contingencies/obligations

If the transaction with the party involved the recognition or extinguishment of a liability or obligation (recognised on or off-balance sheet), then this item is required to be completed where appropriate. If a transaction involving the recognition or extinguishment of a liability or obligation did not occur in the current reporting period/financial year, then item 2 must be left blank. For the purposes of this form, liabilities include claims and commitments recognised both on balance sheet and off the balance sheet of the reporting superannuation entity.

Columns (4) to (9), relating to item 2, are below:

(4) Type

Select from the drop down box:

On-balance sheet exposures

On-Balance sheet exposures relate to those assets or rights recognised on-balance sheet (i.e. recorded on the face of the balance sheet or statement of financial position). For these exposures record the net market value.

Off-balance sheet exposures

Off-Balance sheet exposures relate to those assets or rights that do not satisfy the recognition requirements of the current Australian Accounting Standards and are therefore not recognised on-balance sheet (i.e. not recorded on the face of the balance sheet or statement of financial position). These transactions may include transactions such as performance-related rights, and guarantees, whether revocable or not.

(5) Liability type

Select the liability class type from the drop down list provided.

(6) Face value

Record the face value or principal value of the liability.

(7) Amount paid to settle liability

Where applicable record the amount paid to settle the liability, claim, or obligation.

(8) Net transactions

Represents the aggregate net value of all transactions involving the incurring/settlement of liabilities during the period, between the superannuation entity and the particular related party.

(9) Fair value at balance date

Where the liability of the superannuation entity exists as at the end of the financial year, record the market or fair value of the liability as at balance date.

Note: If this figure is $Nil at year end, a confirmation box will appear on validating the form. Tick the confirmation box, and input an explanation of the reason for this (e.g. “asset disposed of during the year”) in the box provided. The form can then be submitted.

Item 3. Income

If the transaction with the related party involved the acquisition/disposal of an investment/asset and or the recognition or extinguishment of a liability or obligation, it is likely that items of income or expenses recognised by the superannuation entity will also be attributable to such related party transactions.

Where the transaction with the related party constitutes or gives rise to the recognition of income by the superannuation entity, then this item is required to be completed where appropriate.

All income recognised by the superannuation entity which relates to an associated party transaction should be reported under item 3, even if no acquisition or disposal transactions have occurred in the current reporting period/financial year.

Columns (4) to (6), relating to item 3, are below:

(4) Type

Select the most appropriate income type from the list provided where applicable.

Important!

Inter alia, contribution revenue from related parties is included here.

(5) Income recognised

Record the value of the income that is recognised.

(6) Basis income recognised in P&L

Select from the drop down list provided the basis for the recognition of the item of income (i.e. has the income item been received or has it been accrued and is therefore receivable).

Only report items in one reporting period – either when they are accrued or when received/paid, according to the basis on which the transaction is recognised.

Item 4. Expense/benefit payments

If the transaction with the related party involved the acquisition/disposal of an investment/asset and or the recognition or extinguishment of a liability or obligation, it is likely that such transactions will also give rise to income or expenses recognised by the superannuation entity. Where the transaction with the related party constitutes or gives rise to the recognition of an expense by the superannuation entity, then this item is required to be completed where appropriate.

All expenses paid by the superannuation entity which relate to an associated party transaction should be reported under item 4, even if no acquisition or disposal transactions have occurred in the current reporting period/financial year.

Columns (4) to (6), relating to item 3, are below:

(4) Type

Select the most appropriate expense type from the drop down list provided.

Important!

Inter alia, benefit payments to related parties are included here.

(5) Expense recognised in P&L

Record the value of the expense that is recognised.

(6) Basis expense recognised in P&L

Select from the drop down list provided the basis for the recognition of the item of income (i.e. has the income item been paid or has it been accrued and is receivable).

Only report items in one reporting period – either when they are accrued or when received/paid, according to the basis on which the transaction is recognised.