QBCC changes to Minimum Financial Requirements
19 February 2024
Changes in Queensland will make it cheaper and easier for some contractors to prepare financial statements.
Changes to the Minimum Financial Requirements (MFR) Regulation came into effect on 16 February 2024.
The changes allow contractors in some financial categories (SC1, SC2, 1, 2 and 3) to prepare Special Purpose Financial Statements (SPFS) as part of your MFR report, instead of the more onerous General Purpose Financial Statements (GPFS).
The changes will make it cheaper and easier to comply by requiring less detail in the report.
Please find our sharp summary of the changes below.
What you need to know
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Background
The
Minimum Financial Requirements (MFR) framework
applies to contractor licensees in the building and
construction industry and is regulated by the QBCC.
Under the MFR framework, licensees must provide MFR
reports in certain circumstances so the QBCC can assess
whether the licensee continues to have sufficient
working capital and can cover their debts.
This includes where there are changes in a licensee’s
circumstances or where they wish to change their licence
category.
In July 2021, the Australian Accounting Standards Board
removed the ability for some for-profit entities to
prepare Special Purpose Financial Statements (SPFS) for
their MFR reporting to the QBCC.
As a result, all licensees were required to prepare
General Purpose Financial Statements as part of their
MFR report, which increased costs for contractor
licensees in financial categories SC1, SC2, 1, 2 and 3.
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The changes
The
Building Industry Fairness (Security of Payment) and
Other Legislation Amendment Bill 2024
came into effect on 16 February 2024.
It allows a QBCC contractor licensee in financial
category SC1, SC2, 1, 2 or 3 (who is required to prepare
an MFR report) to prepare a Special Purpose Financial
Statement (SPFS) as part of your report.
Contractor licensees impacted by the change are:
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SC1 - Maximum revenue of not more than $200,000
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SC2 - Maximum revenue between $200,000 and
$800,000
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Cat 1 - Maximum revenue between $800,000 and $3M
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Cat 2 - Maximum revenue between $3M and $12M
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Cat 3 - Maximum revenue between $12M and $30M
The amendments make it cheaper and easier to comply by
reverting to a previous and less onerous level of
detail, which is appropriate for these categories of
licensees.
This change applies to MFR reports for the quarter
ending 31 December 2023 and onwards.
Licensees applying to change their maximum revenue to an
amount covered by one of the above licence categories
may also use the new provisions.
No changes have been made to the existing requirements
for contractor licensees in financial categories 4-7.
There are no changes to annual reporting requirements.
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More information
For more information, please see:
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Got a question? Contact AMCA on 1300 475 615 or [email protected].