The Queensland Building and Construction Commission (QBCC) renewed the Minimum Financial Requirements policy (MFR) from 1 January 2019. The regulation has been implemented with the aim to restore effectiveness of the MFR for licensing.
While there are a number of transitional provisions that apply until 31 December 2019, there are significant changes to the policy which impact the financial responsibilities of licensees going forward.
The changes to the MFR are listed below.
- Annual Reporting
Licensees with a turnover in excess of $800,000 now need to provide the QBCC with financial reports annually. These reports will vary depending on your category, which is based on your turnover. The QBCC will be checking that you meet three main financial requirements around Net Tangible Assets, Current Ratios and Maximum Revenue – see the details here.
If you are a licensee with a turnover of less than $800,000 you don’t have to provide financial statements, however you are required to provide a declaration and some basic financial information.
The QBCC has been closely regulating and reviewing licences since introducing the new regulations. It’s important that all requirements are complied with and information provided is accurate.
2. Maintain Internal Management Accounts
You are required to prepare quarterly management reports and provide these to QBCC within 14 days if requested. This includes:
- profit and loss
- balance sheet
- aged debtors and creditors
- statement of cash flows
3. Notify QBCC of Significant Change to Business
If there is a change to the owners of your business, including the executive officer (for companies), the trust deed or trustee (for trusts) QBCC must be notified as soon as practical.
4. Notify QBCC of decrease in Net Tangible Assets (NTA)
If you have a decrease in your accepted NTA of more than 30% (or for category 4 and above, 20%) QBCC must be notified within 30 days.
5. Apply to QBCC for an increase in Maximum Revenue
If your actual turnover is likely to exceed the allowed MR by more than 10%, you are required to have a new MFR Report prepared and sent to QBCC before the turnover exceeds the 110% threshold.
6. Pay Debts
It is also a requirement that you pay all debts owing to a contracted party, supplier of goods or services, on or before the date the debt becomes due.
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