19 August 2022
From 1 July 2022, the prescribed accounting standards have changed, with a knock-on effect impacting QBCC Minimum Financial Requirements (MFR) Reports.
Special Purpose Financial Statements (SPFS) are no longer accepted by the QBCC as part of an MFR Report. This means QBCC will now require General Purpose Financial Statements (GPFS), which will likely add additional difficulty and costs for any licensee submitting an MFR Report.
What are General Purpose Financial Statements?
GPFS’ are financial reports that businesses like large public companies are required to submit as part of their responsibilities to shareholders and other governing bodies.
What is an MFR report?
An MFR report or declaration demonstrates to the QBCC that you have:
- enough working capital—net tangible assets
- in relation to your debts—current ratio
- for your intended and allowable annual turnover—maximum revenue.
Depending on your annual turnover (and financial category) this may take the form of a:
- MFR declaration – prepared by SC1 and SC2 licensees
- MFR report – prepared by an accountant for Cat 1-7 licensees.
When are MFR Reports required?
MFR Reports are required in some situations for licensees in Category 1 and above including:
- Applying for a new contractor licence
- For audit purposes
- When licensees upgrade to a new licence category (e.g. upgrading from SC2 to Category 1)
- Licensees trading in a trust
- Reporting a decrease in net tangible assets
- Substantial business changes, and more.
A full list of when an MFR Report is required is available on the QBCC website.
Next steps & more information
If you think you might be affected by this accounting change, we encourage you to speak with your accountant and ensure they are able to provide the requisite financial statements and advise any additional cost.
For more information on the accounting change and impact on QBCC financial requirements, please see the relevant QBCC webpage.
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