If you’re in the building and construction industry, there are changes coming to how the Queensland Building and Construction Commission (QBCC) will require reporting, starting from as early as 1 January 2019. Due to changes in legislation in 2014 that has prevented the QBCC from monitoring companies at potential risk of insolvency or collapse as closely, as it had done pre-2014, the QBCC have decided to re-instate a compulsory annual Minimum Financial Requirement (MFR) regulation to be reported on.
Snapshot of the Changes To Come
There are some major changes that will be occurring from as early as 1 January 2019. The key ones in a nutshell:
- Mandatory annual reporting to the QBCC for Categories 1 and above ;
- An increase for the Categories SC1 and SC2 self-certification to $800,000 (up from $600,000);
- An increase to reporting for Categories 4 to 7 in the form of a balance scorecard and cash flows;
- For those in Categories 4 to 7 , they will be required to provide updated reports to the QBCC when their Net Tangible Assets decrease by 20% or more (this is down from 30% historically).
Important Dates & Reasons for Changes
The reporting requirements will vary depending on the category that your business trades in, however, the additions to the MFR aims to:
- Strengthen reporting requirements
- Provide clarity about what can be included when calculating a licensee’s assets and revenue
- Improve the QBCC’s data availability and quality.
These changes will be rolled out in two Phases. Important dates and changes are outlined below.
Phase 1 Commencement Date: 1 January 2019
Changes: reintroduce mandatory annual reporting, require larger, high risk licensees to report decreases in Net Tangible Assets of 20% or more, and provide clarity about calculating a licensee’s assets.
Phase 2 Commencement Date: 1April 2019
Changes: remaining reinforcements will be implemented.
Changes By Categories
Regardless of the category your business falls within with the QBCC, you will need to provide financial information to the QBCC each year and complete annual reporting which will now leverage existing reporting requirements to make reporting easier for you.
Categories SC1 and SC2 (those with lower revenue):
- Revenue threshold for self-certification categories will also be raised from $600,000 to $800,000 and self-certify that requirements are being met will continue.
- Self-certifying licensees will need to report their Current Ratio of assets to liabilities, to providing more complete financial information. A new online reporting tool will be released to make it easy for reporting.
Categories SC1 to category 3:
- Current requirements with decreases in Net Tangible Assets of 30% or more requiring to be reported on will continue with the new MFR regulations.
Categories 4 to 7 (those with higher revenue):
- Decreases in Net Tangible Assets of 20% or greater will need to be reported.
- Licensees must provide more detailed financial information in the form of a balanced scorecard .
If you have any questions about the new MFR requirements that and how they will affect you, find out more at the Department of Housing and Public Works’ website or contact us today!