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


The Queensland Building and Construction Commission (Minimum Financial Requirements) Amendment Regulation 2024 came into effect on 16 February 2024. The change will simplify and reduce the costs of preparing Minimum Financial Requirements (MFR) reports for some contractor licensee categories.

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.

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:

  • SC1 - Maximum revenue of not more than $200,000

  • SC2 - Maximum revenue between $200,000 and $800,000

  • Cat 1 - Maximum revenue between $800,000 and $3M

  • Cat 2 - Maximum revenue between $3M and $12M

  • 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.

Got a question? Contact AMCA on 1300 475 615 or [email protected].