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 If you own a construction business, a recent change to financial reporting requirements may apply to you.
Take a look at the details and contact us if you need to know more or update your records.
QBCC MFR Requirements
The QBCC is the Queensland Building and Construction Commission. It is a statutory body that regulates the building industry in Queensland. Its purpose is to provide peace of mind to all people who use buildings in Queensland and to those who take part in the process to construct them.
MFR refers to minimum financial requirements.
Depending on the type of licence your business holds and the amount of revenue you generate, you will need to submit either an MFR report or declaration to prove to the QBCC that you have enough working capital in relation to your debts for your intended and allowable annual turnover.
SC1 and SC2 licensees with annual turnover below $800,000 DO NOT have to submit an MFR declaration, unless requested by the QBCC or there is a substantial change in the business revenue or assets – Â MFR report or declaration | Queensland Building and Construction Commission (qbcc.qld.gov.au)
Construction companies with Cat 1-7 licences have to have a more complex MFR report prepared by an approved, independent accountant.
Last year, the QBCC suspended the licences of 71 builders and sub-contractors that didn’t align with MFR requirements and share proof of their financial health. The initiative is part of an effort to ensure companies don’t collapse and leave their customers out of pocket.
QBCC MFR Updates in 2023
Prescribed accounting standards changed on 1 July 2022.
In the past, simpler, Special Purpose Financial Statements (SPFS) were accepted by the QBCC as part of an MFR Report.
Now, the QBCC requires a General Purpose Financial Statement (GPFS). This adds to the complexity and costs of your MFR Report, regardless of the type of licence you hold.
If you fall within licence category 1-3, you will need to work with your accountant to prepare a GPFS if you fall within the requirements to lodge a Minimum Financial Requirements (MFR) report for the current financial year.
For businesses that fall within licence categories 4-7, a GPFS must now be submitted every year when lodging your annual financial reporting information.
Regardless of the category your business is in, you will be required to provide signed financial statements when lodging an MFR report.
What does this mean?
Lodging your MFR information has become more complicated, and you need to ensure the report you share complies with Australian Accounting Standards.
If your business is category 4-7 or if you operate a smaller business that has changed a lot during the last financial year, you need to speak with your accountant about how to meet updated minimum financial requirements in the event of you needing to submit a report.
Own a construction business? The best thing to do is give our QBCC acountants a quick call; we can let you know what action is required.
Will the QBCC changes affect your financial reporting requirements? Contact Crest Accountants to find out.
Disclaimer: The information contained in this news post is general in nature and is intended to provide a general summary only and should not be relied on as a substitute for professional advice. Whilst the information is considered to be true and correct at the date of publication, changes in circumstances after the time of publication may impact upon the accuracy of the information.
