Net Tangible Assets

Net Tangible Assets means the total assets of a business, less any intangible asset such as goodwill, patents, and trademarks, less all liabilities. Your net tangible assets (NTA) will determine your maximum revenue (MR) for the forthcoming year.

NTA = [Entity’s Assets] – [Entity’s Liabilities] – [Entity’s Intangible Assets] - [Entity's Disallowed Assets]

About assets

You must own your assets both legally and beneficially (e.g. real estate, cash, collectible investments) and they cannot include assets held on trust for another person or corporation.

They don't include the following:

  • furniture (personal)
  • investments or shares in companies that are not publicly listed companies
  • investments values using equity accounting methodology where included in special purpose financial statements
  • units in trusts that are not publicly listed
  • trade or barter dollars and any equivalent scheme
  • assets assured to another licensed entity through a Deed of Covenant and Assurance.
  • assets not assessed as collectible
  • boats, ships, jet skis, planes, helicopters, race horses and racing cars
  • collectors items (e.g. paintings, stamps, coins)
  • contingent assets
  • unvested superannuation benefits, and
  • life or income protection insurance policy benefits.

Liabilities

All your liabilities must be taken into account. This includes any debts or obligations you must pay or settle within a certain period of time or pay on demand (e.g. amounts of related entity loans, shares in companies not publicly listed).

What are intangible assets?

Intangible assets include, but are not limited to:

  • Goodwill
  • Right of Indemnity
  • Intellectual Property
  • Formation Expenses
  • Value of Trademark
  • Patents
  • Borrowing Expenses, and
  • Deferred tax assets.

Related entity loans

Accountants must indicate if related entity loan assets have been included, and must verify their collectability. You cannot include:

  • shares in a company which is not a publicly listed. Only shares in publicly listed companies can be counted towards NTA. This also includes units in an unlisted trust
  • related entity asset loans which are not independently verified as collectible
  • investments valued using the equity accounting methodology.

NTA and financial category

An accountant completing the financial report may restrict the licensee's revenue to the category required by stating the NTA as only the amount required for the level of revenue being sought.

Example: Licensee has an NTA of $250,000 which would provide for a maximum revenue of more than $5.6 million. If the licensee only wants an MR of $3,000,000, the accountant can restrict the MR to $3,000,000 by stating 'at least' $156,000 NTA in the MFR Report.

All licensees are subject to conditions:

  • Your NTA is not to decrease by more than 30% from the amount previously stated to the QBCC. This includes a decrease in assets assured by way of a Deed of Covenant and Assurance
  • You must send an updated MFR Report (PDF) within 30 days of the NTA decrease
  • You must have an NTA in your own right of at least $0.

MR under $600,000 – You must meet the NTA requirement from personal assets and liabilities.
MR over $600,000 – You must meet the NTA requirement as follows:

Business structure

NTA from:

Sole trader

  • personal assets and liabilities

Stand-alone company

  • company assets and liabilities; or
  • in combination with assets assured by one or more Director/s or an associated company of the applicant/Licensee by way of a Deed of Covenant and Assurance (Deed).

Partnership

  • company’s assets and liabilities; or
  • in combination with assets assured by your partner by way of a Deed

NOTE : Evidence of a formal business Partnership Agreement (PDF) must be provided where a Deed is provided by the partner of the applicant. You cannot include the assets of the partnership but may include your personal EQUITY (OR LOSS) of the partnership in determining your NTA

Example - If the partnership equity is $10,000 and you have a 40% share within the partnership, equity of $4,000 may be included as a personal asset in your NTA.

Trust
For an individual:
 
  • personal assets and liabilities; or
  • in combination with assets assured by one or more of the Beneficiaries of the Trust by way of a Deed
For a company :
 
  • assets and liabilities of the trustee company, exclusive of the trust (eg $10 representing the issued share capital of the company); or
  • in combination with assets assured by way of a Deed from one or more of the following:
    • beneficiary of the trust
    • director of the Licensee or;
    • associated company of the Licensee

NOTE : Assets and liabilities held in the Trust cannot be taken into consideration in determining NTA and cannot be assured to the applicant through the use of a Deed. Assets held on trust for another person or corporation do not fall within the QBCC’s definition of an “asset”.

Subsidiary company within a consolidated group subject to ASIC Class Order (98/1418)

A Company subject to an ASIC Class Order (98/1418) - Deed of Cross Guarantee, may meet the NTA requirement from either:

  • the assets and liabilities of the Consolidated Group;
  • the assets and liabilities of the Closed Group of companies subject to the Class Order; or
  • the assets and liabilities of the applicant in its own right;
  • in combination with assets assured by a Deed by an approved assurer

The applicant or Licensee party to the Deed of Cross Guarantee will be required to provide evidence that the Deed is in place when submitting the MFR Report and signed financial statements.

Parent company within a consolidated group

A parent company of a consolidated group subject to ASIC’s audited requirements, may meet the NTA requirement from either:

  • the assets and liabilities of the Consolidated Group;
  • the assets and liabilities of the Closed Group of companies subject to the Class Order (if applicable); or
  • the assets and liabilities of the applicant in its own right;
  • in combination with assets assured by a Deed by an approved assurer

The applicant or Licensee party to the Deed of Cross Guarantee will be required to provide evidence that the Deed is in place when submitting the MFR Report and signed financial statements.