All QBCC Licence holders should have received correspondence from the QBCC advising them of the changes to the Minimum Financial Requirements (MFR) that has taken effect from 1 January 2019.
As a QBCC licence holder these changes are important and should not be ignored by you.
Failure to prepare and report your financial position in the format required by the QBCC could lead to suspension or cancellation of licence and other penalties that can be levied by the QBCC under the Act.
What has changed? Due to the number of high profile insolvencies and corporate collapses in the industry, the QBCC has re-introduced a far more stringent and detailed MFR reporting process.
It is no longer self-assessment but annual reporting of a more detailed nature.
The new MFR regulation that commenced on 1 January 2019 operates alongside the current MFR Policy and now requires licence holders to submit annual MFR reports of a type as prescribed by the Act for their licence category, including self-assessed SC1 and SC2 licence holders.
You will need DLA Partners to assist you in preparing the various MFR reports as the reports must be prepared in accordance with Australian Accounting Standards and you must comply with the existing MFR Policy in relation to Net Tangible Assets (NTA), Maximum Revenue (MR – formerly Allowable Annual Turnover (AATO)) and Current Ratio.
Licensee’s with Category SC1 and SC2 will need to provide the QBCC a declaration in approved form about their revenue and NTA before 31 December of each year, based on 30 June accounts (e.g. 30 June 2019 to be submitted to the QBCCC by 31 December 2019).
Licensee’s with Category 1, 2 & 3 will need to submit a Profit & Loss Statement, Balance Sheet, Statement of Debtors and Creditors and a Statement of Cash flows (all prepared in accordance with Australian Accounting Standards) to the QBCC before 31 December of each year, based on 30 June accounts (e.g. 30 June 2019 to be submitted to the QBCC by 31 December 2019).
Licensee’s with Category 4, 5, 6 & 7 ($30m + revenue) will need to submit Signed Financial statements comprising a Profit & Loss Statement, Balance Sheet, Statement of Debtors and Creditors and a Statement of Cash flows (all prepared in accordance with Australian Accounting Standards) to the QBCC before 31 March of each year, based on 30 June accounts (e.g. 30 June 2018 to be submitted to the QBCC by 31 March 2019) (with limited exemptions if already reporting to ASIC).
What do you need to do? The DLA relationship team will be contacting each QBCC Licence holder to discuss how the QBCC’s new MFR will impact them and the solution required to maintain their QBCC licence, alternatively you can contact us on 07 3863 9444.
Need more information?
Here are QBCC fact sheets that explain the changes and the obligations of QBCC licence holders.
QBCC – changes to MFR – http://www.qbcc.qld.gov.au/blog/legislation/minimum-financial-requirements-mfr
QLD Public Works Website – http://www.hpw.qld.gov.au/SiteCollectionDocuments/MFRIntroducingTheNewFramework.pdf
Source
Legislation is the “Minimum Financial Requirements Regulation 2018” – https://www.legislation.qld.gov.au/view/pdf/asmade/sl-2018-0218 which sits alongside the current legislation and MFR Policy. The new regulations trump any inconsistency with the MFR Policy (section 19).
This information does not constitute financial or legal advice and is for general information purposes only. Please contact DLA Partners for specific advice relating to your particular circumstances.