Financial reporting for licensees
Frequently asked questions for Minimum Financial Requirements
- Which licensees are affected by the financial requirements?
- MFR versus annual reporting versus licence renewal
Annual reporting questions
- What will happen if I don't submit my annual financial report by the required reporting day?
- I have submitted and haven’t heard back, do I have to resubmit? Will I be penalised?
- When do I have to submit my annual report again this year?
- How early can I submit again this year?
- Will I lose my licence?
- Why is QBCC making us do this? Do I have to do this every year from now on?
Minimum Financial Requirements (MFR) questions
- What is an MFR Report?
- When is an MFR Report required?
- When changing (downgrading) from Category 1-7 to a Self-Certifying licensee (SC1 or SC2), what paperwork is required?
- What is Maximum Revenue (MR)?
- Deed of Covenant and Assurance
- Who can provide a Deed?
- Can the amount assured under the Deed of Covenant and Assurance be used in the calculation of the licensee's current ratio?
- Where there is a company licensee and the director is also licensed, can the assets used for the director's licence be assured to the company?
- A beneficiary of a trust is going to provide a Deed of Covenant and Assurance in favour of the trustee. The beneficiary's only asset is its interest in the trust. Is this acceptable?
- What does the term related body corporate mean where that term is used in relation to the giving of a Deed of Covenant?
- If more than one person is giving a Deed of Covenant and Assurance in support of a licensee, are separate deeds required or can they all sign the one Deed of Covenant?
- Can Self-Certifying Category 1 or 2 (SC1 and SC2) licensees rely upon a Deed of Covenant and Assurance to meet the financial requirements?
- Can I rely upon a Deed of Covenant and Assurance to meet the current ratio requirement?
- Qualified Accountants
- Who is a Qualified Accountant to complete MFR Reports?
- Can the Qualified Accountant re-type or alter the wording in the MFR Report?
- Does the Qualified Accountant have to assess the licensee against all Australian Accounting Standards?
- When the requirements state the accounts are to be no older than four months in age – what does this mean?
- What is an excluded accountant?
- Why is an accountant excluded?
- What if a licensee uses an excluded accountant to complete MFR reports?
- How do I know if an accountant is an excluded accountant?
Common terms/general questions
- Net Tangible Assets
- Cashflow statements
- Trust structures
- Current ratio calculation
- Related entity loans
- Offsetting of related entity loans
- Unpaid Present Entitlements
- Treatment of depreciated (written down) assets versus book value
Licensees that hold a contractor/builder grade of licence are required to meet the Minimum Financial Requirements (MFR) to obtain and maintain a QBCC licence. If you hold a Contractor licence, you are required to lodge your annual financial report by the required reporting day, as well as meeting the MFR at all times. If you have not undertaken any contracting in your own right, your revenue for the period would be $0 which you would advise QBCC on the annual reporting form.
If you are retired, not currently trading in the building industry, or an employee, you may wish to amend your licence to a Nominee Supervisor by completing the Change Licence Type form and paying the appropriate fee. The holder of a Nominee Supervisor licence can be the employee for a licensed company but cannot contract to perform building work in their own right.
Licensees who hold only a Site Supervisor, Nominee Supervisor or Occupational licence are not required to meet any MFR requirements. Building Certifiers and Pool Safety inspectors are also exempt from meeting the MFR as these two licences are issued under the Building Act 1975.
Licensees and applicants with the following classes do not have to meet the minimum financial requirements in certain circumstances:
- Builder Project Management Services
- Building Design – Low Rise
- Building Design – Medium Rise
- Building Design – Open
- Hydraulic Services Design
- Hydraulic Services Design (excluding design of on-site domestic waste water management)
- Site Classifier
- Site Classifier (excluding on-site domestic waste management).
There are three aspects to your licence now:
- Licence renewal – the payment of a roll or renewal fee to keep your licence current. This can be paid for one year or three years.
- Annual Reporting - is a once a year submission based on the information that is required for each licensee's maximum revenue. These will be assessed to confirm licensees are meeting the financial requirements of the regulation. Annual Reporting information does not need to have any accounting standards applied, does not need to be prepared by an accountant, and can be based on your most recent reporting/financial year information.
- MFR applies when:
- Apply for a new licence
- If you decrease your NTA by 20% or 30% (depending on your licence category)
- If you breach your turnover level by more than 10%, if your business structure changes, or
- If we request it.
Annual reporting questions
If you fail to provide your financial information by the required reporting day, the QBCC may take regulatory action. However, if you are in category SC1, SC2 or Category 1-3, we will generally adopt the following cascading actions, in the following order:
- We will send two reminders to licensees who have not lodged their financial information
- We will notify you of a proposed condition on the licence that no new contracts can be entered into until the annual financial report is lodged.
- We will impose the licence condition and give notice to show cause why the licence should not be suspended;
- The licence will be suspended and a notice to show cause why the licence should not be cancelled will be given;
- The licence will be cancelled.
There is no need to resubmit your information. You should have received an email message thanking you for your annual financial reporting documentation.
Online submissions receive an automatic response but if you have submitted manually, receipt of your information will not be immediate and your patience is appreciated during this time.
The first reporting year under the MFR Regulation is 2019. The ‘annual reporting day’ for all licensees was set as 31 December 2019. You may change your annual reporting day on application to the QBCC for subsequent years.
A reminder will be sent out 40 business days prior to your next annual reporting day.
The QBCC has powers to impose penalties and licence conditions for failure to lodge annual financial information. The QBCC will generally adopt a number of cascading actions before a licence is cancelled due to annual reporting not being submitted. Details of these actions are listed under the above FAQ "What will happen if I don't submit my annual reporting by the required reporting day?"
You only need to provide an annual report if you hold a contractor licence under the QBCC Act. See Annual Reporting for more information.
The QBCC's goal is to see you get paid in full and on time for the work you do. Annual reporting requirements have been introduced to ensure every building contractor in Queensland has a strong and financially sustainable business with an appropriate level of working capital. These new laws require licensees who hold a contractor-grade licence to provide annual financial information each year.
Minimum Financial Requirements (MFR) questions
MFR Report is a QBCC report which is required to be given to the QBCC by licensees in the following circumstances
- When you apply for a new licence (Category 1 upwards)
- If your NTA position decreases by more than 20% for Categories 4-7 licensees and 30% (for all other licensees)
- If you no longer meet the minimum Current Ratio of at least 1:1
- If your MR needs adjusting (you must not exceed your MR by more than 10% in each financial year)
- If we request it.
- The age of the accounts being relied upon for an MFR Report can be no older than four months old
- from the end of the financial reporting period being relied on, and
- at the date the accepted independent accountant signed the Report
- Cannot contain negative dollar value in assets
- For an application or change of your maximum revenue, we will not accept an MFR Report if it is signed more than 30 days before we receive it.
Essentially, an MFR Report is required if you need to update any information previously provided by your accountant. Information provided with an MFR Report must be signed off by an accountant, must be accompanied by signed financial statements, must have relevant accounting standards applied, and must be no older than four months in age.
When is an MFR Report required?
An MFR report is not required, unless trading through a trust.
An MFR report is not required, unless trading through a trust.
MFR Report required in all of these circumstances
MFR Report required in all of these circumstances
Maximum revenue adjustment
SC1 or SC2 licensee increase maximum revenue to Category 1
MFR Report required
MFR Report required
Change of licence grade: Nominee Supervisor to Contractor
Expiry of PI Insurance
Change of ownership of office holders
Restructure of partnership
Change or withdrawal of covenantors
|Not applicable||Not applicable||
Revoking a deed
|Not applicable||Not applicable||
Annual reporting obligations
An MFR report is not required.
When changing (downgrading) from Category 1-7 to a Self-Certifying licensee (SC1 or SC2), what paperwork is required?
An MFR Report is not required. You will be required to provide the following:
- Change of Maximum Revenue application form (PDF)
- Either a Self-Certifying Category 1 or 2 Declaration (Declaration of Maximum Revenue), and
- A balance sheet to confirm NTA of minimum $12,000 (SC1) or $46,000 (SC2), and a profit and loss statement to confirm turnover is less than $200,000 (SC1) or $800,000 (SC2).
Maximum revenue (MR) for your reporting year, includes the total income you receive from the building industry and any other source including outside Queensland and overseas, but excludes wages and salary.
Your MR is determined by your net tangible assets. For example; if your net tangible asset value is $95,000 your maximum revenue can be up to $1,779,990.00. This is the maximum amount you can turn over not the amount you must meet. Alternatively, you may nominate a lower amount of MR.
You can increase your MR by up to 10% without obtaining prior approval from us. If you want to increase your turnover by more than 10%, you must first provide us with a new financial Declaration or MFR Report that supports the increase.
Do I only include turnover (or income) I earn for building?
No, it is ALL turnover (or income) that you earn from all sources.
(Except for salary or wages that you receive if you are an employee rather than a contractor)
Do I only include turnover that my company makes in Queensland?
No, all turnover is included for the company
- If you are unsure of your MR or NTA the QBCC website has a handy MR/NTA calculator.
- If you are unsure of the financial category previously approved with the QBCC you can search your licence on the QBCC website. The category is displayed on the landing page of the licence search.
Your MR will place your licence within a financial bracket of either a Self-Certifying Category1 or 2 (SC1 or SC2) or Category 1-7.
- MR of not more than $200,000 - Self-Certifying Category 1 (SC1)
- MR of more than $200,000 but not more than $800,000 - Self-Certifying Category 2 (SC2)
- MR of more than $800,000 but not more than $30,000,000 – Categories 1, 2 and 3
- MR of more than $30,000,000 – Categories 4 – 7.
The Deed of Covenant and Assurance (the Deed) allows licensees who do not have sufficient Net Tangible Assets (NTA) in their own right to rely on assets of certain related parties to meet the NTA requirements. The Deed must be executed on the approved form and the original executed document provided to the QBCC.
The Deed of Covenant and Assurance creates a legal obligation on both parties, hence the requirement for the licensee and the assurer to receive legal advice (highly recommended for licensee, compulsory for the assurer/covenantor). The Deed may become enforceable upon an insolvency event of the licensee.
The trustee in bankruptcy or liquidator may make a demand on the assurer to pay the amount stated in the last MFR Report. The Deed contains a charging clause that assurers should have explained to them prior to the execution of the Deed.
Section 17C of the Queensland Building and Construction Commission (Minimum Financial Requirements) Regulation 2018 sets out who can provide a Deed of Covenant and Assurance.
It is the responsibility of the qualified accountant completing the MFR Report to determine that the covenantor is an appropriate covenantor as stated in the Regulation.
A beneficiary of the trustee company is outside the stated relationships in Section 17C of the Queensland Building and Construction Commission (Minimum Financial Requirements) Regulation 2018.
Can the amount assured under the Deed of Covenant and Assurance be used in the calculation of the licensee's current ratio?
No, the Deed of Covenant and Assurance can only be used to support the NTA requirements of the licensee. However, the licensee NTA must be at least $0 before the assured amount is included.
Where there is a company licensee and the director is also licensed, can the assets used for the director's licence be assured to the company?
No, the assets may only be counted once, not twice or more. If they are being used to support the director's personal licence, they must be deducted before determining the amount available which can be assured to the licensee.
A beneficiary of a trust is going to provide a Deed of Covenant and Assurance in favour of the trustee. The beneficiary's only asset is its interest in the trust. Is this acceptable?
The beneficiary will only be entitled to provide a deed of covenant to the extent that the beneficiary has a presently existing entitlement to a distribution from the trust (i.e. the beneficiary has a vested interest). The accountant will also need to determine that the distribution entitlement is able to be recovered or is collectible to be able to rely upon it.
What does the term related body corporate mean where that term is used in relation to the giving of a Deed of Covenant?
A related body corporate of the licensee is a company that is related to the licensee within the meaning of section 50 of the Corporations Act 2001.
If more than one person is giving a Deed of Covenant and Assurance in support of a licensee, are separate deeds required or can they all sign the one Deed of Covenant?
QBCC will accept both alternatives. All of the Covenantors can sign a single Deed, or they can each sign separate Deeds.
Can Self-Certifying Category 1 or 2 (SC1 or SC2) licensees rely upon a Deed of Covenant and Assurance to meet the financial requirements?
You cannot rely upon a Deed if your MR is less than $800,001. SC1 or SC2 licensees are not able to rely upon a Deed.
A Deed is only used for NTA requirements, it is not used to meet or adjust the current ratio requirement.
The QBCC considers all persons who meet one of the following requirements to be a Qualified Accountant:
- Meet the requirements to be considered a Qualified Accountant outlined in ASIC Corporations (Qualified Accountant) Instrument 2016/786
- Be a Registered Company Auditor
- Hold a current public practising certificate from the Association of Taxation and Management Accountants or National Tax & Accountants Association.
The Qualified Accountant must be independent of the applicant or licensee (ie not a spouse, investor, shareholder etc).
The MFR Report may be re-typed onto the letterhead of the qualified accountant as long as the wording in the body of the document is not altered.
Does the Qualified Accountant have to assess the licensee against all Australian Accounting Standards?
The client must use all relevant Australian Accounting Standards in the preparation of the financial statements that will form the basis of the MFR Report.
By completing and signing the MFR Report, the Qualified Accountant is warranting that all relevant Australian Accounting Standards for that licensee have been complied with when compiling the report.
When the requirements state the accounts are to be no older than four months in age – does this mean the report is to be dated no more than four months old or the end of the actual reporting period is to be no more than four months ago?
The reference to four months age of accounts means no more than that length of time has lapsed between the period end date stated on the report, and the date the report is signed by the accountant and licensee.
Common terms/General Questions
Net Tangible Assets (NTA), means the net assets of a business:
- Less any intangible assets such as goodwill, borrowing costs, patents, and trademarks
- Less any disallowed assets, such as jet skis, boats, racehorses, personal furniture, collector 's items
- Less all liabilities.
Applicants/licensees must have sufficient NTA to meet the minimum requirements. Combined with the defined amount of a Deed of Covenant and Assurance, the NTA must be sufficient to cover the actual revenue being carried out.
Applicants/licensees cannot have a negative NTA position. Entities with a negative NTA position cannot rely upon a Deed (a Deed can only be relied upon if the applicant/licensee has NTA of at least $0). We have an online calculator to work out how much NTA you need to cover your turnover, or vice versa.
If the NTA amount reported to QBCC decreases by more than 30% (if Category 1 -3) or 20% (if Category 4 - 7) from the last advised position, a new financial report must be provided within 30 days.
All related entities providing financial information i.e. related entities owing loans to a licensee, the trust through which the trustee company trades, or the Covenantor providing financial information to assure a Deed of Covenant and Assurance, are assessed on the same basis - this means financial information provided for related entities, Trusts and Covenantors are not to include intangible, disallowed or uncollectible assets in calculations, and cannot remove any liabilities from calculations under any circumstances.
Acceptable assets are things you own in your own name.
- Work in progress
- Money held in a project bank account that you are entitled to
- Retention money you are entitled to
- Registered motor vehicles
- Real estate
- Tools of trade
- Plant & Equipment
- Stock on hand
- Some loans you have given out to related entities
- Some money owing to you from clients / homeowners etc
- Shares in publicly listed (ASX) companies.
Can I use my family home as an asset?
Yes, a home can be used as an asset, only your share can be used in the calculation. If you and your husband/wife own your house together, you can only include your 50% share of the home.
- Paintings, stamps or coins
- Personal furniture
- Off road motorbikes
- Quad bikes
- Golf buggies
- Jet skis
- Money owing to you if it is disputed or subject to legal or court proceedings
- Money owing to you from a homeowner if it is older than 1 year old
- Franchise fees
- Deferred Tax Assets
- Barter dollars
- Assets held by someone else (held on trust for a beneficiary other than yourself)
- Superannuation if you cannot access it immediately
- Life insurance policy benefits
Liabilities are debts you owe to others.
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). All liabilities must be taken into account.
- Mortgage owing on property
- Credit card debts
- Car finance debts.
If you don 't declare your house as an asset, do you still need to declare the mortgage as a liability?
Yes, all liabilities have to be taken into account.
Current ratio is worked out by comparing a licensee's current assets to its current liabilities. This helps to determine the businesses financial viability. Current ratio = current assets/ current liabilities. Current ratio must be at least 1:1.
For every 1 dollar of current liabilities, you must have at least 1 dollar in current assets.
Example: Current ratio = current assets/current liabilities = $52,000 / $30,000 = 1.73:1
If you have no liabilities, your current ratio would be the total of your current assets to 1 or 0 – for example, if your current assets totalled $5,000 but you have no current liabilities, your current ratio would be 5000:1 or 5000:0
The ratio must still be provided even if there are no current liabilities. It must be expressed as a numerical ratio e.g. 1.73:1 OR 1.73:0.
Applicant or licensees must meet the minimum requirement of 1:1 at the time of application, and at all times whilst the licence is held.
There may be instances where assets are removed from the calculation of the current ratio due to those assets being intangible or disallowed assets under the Queensland Building and Construction Commission (Minimum Financial Requirements) Regulation 2018. However, all current liabilities must be considered when calculating the current ratio.
Related Entity Loans or Investment Assets which have been excluded in determining the NTA calculation must also be excluded from the Current Ratio calculation, where they are recorded as a current asset.
A current asset is an amount owing to you by someone else that you expect to receive within the next 12 months.
A current asset is not:
- Formation expenses
- Uncollectible debts
- Real estate not currently for sale.
A current liability is an amount owing by you to someone else that you expect to pay within the next 12 months.
If a debt owing to a licensee is disputed or is subject to legal proceedings, the amount cannot be included in the calculation of NTA or the current ratio, unless recovery is deemed to be virtually certain (as set out in AASB 137 Provisions, Contingent Liabilities and Contingent Assets).
AASB 137 (covering contingent assets) uses the words "virtually certain". Therefore, unless there is clear evidence that the outcome is virtually certain, rather than probable, then it would be a contingent asset and just a disclosure, rather than accounted for as an asset in the balance sheet.
What period will the cashflow report need to cover? The same financial year of the annual reports or is it a projection for the next financial year?
i.e. If 30/6/19 is the reporting date, is the cashflow for 1/7/18 - 30/6/19 or 1/7/19 - 30/6/20?
The statement of cashflow will need to cover the same reporting period as the rest of the documents being provided.
Is the statement of cash flows for the same period as the profit and loss statement?
All financial information is required to be for the same reporting period.
The Pty Ltd "trustee" company (licensee) will usually have $2 or $10 assets (paid up capital). We require financial statements for both the trustee and the trust for the same reporting date. Whilst all trading is usually completed under the trust, the trustee company is still required to provide signed financial statements to confirm its net asset position.
The current ratio is the combination of trust and trustees current assets over current liabilities, but NTA is calculated solely on trustee (Pty Ltd) net assets. If the trust has a negative net asset position, the trustee (licensee) has to absorb that amount.
In calculating the trust's net asset position, disallowed assets of the MFR are excluded from the calculation. Usually, the only way the trustee company can meet the NTA test is to rely upon a Deed from a director, beneficiary or associated company.
The Trust financial statements are still assessed on the MFR framework:
- Any related entity asset loans need to be confirmed as collectable
- Any borrowing costs/intangible assets need to be deducted from net assets
- Trade debtors need to be assessed for collectability
- Disallowed assets as listed in the MFR need to be deducted.
If, by deducting disallowed or uncollectible asset amounts from the trust's net asset position, this results in a negative NTA position for the trust, this negative NTA position would then flow back to the trustee (licensee) entity. The licensed entity would then need sufficient NTA of its own to absorb any deficiency in the Trust.
All related entities providing financial information i.e. related entities owing loans to a licensee, the trust through which the trustee company trades, or the Covenantor providing financial information to assure a Deed of Covenant and Assurance, are assessed on the same basis - this means financial information provided for related entities, trusts and Covenantors are not to include intangible, disallowed or uncollectible assets in calculations, and cannot remove any liabilities from calculations under any circumstances.
As trustee for a trust, assets held by a trustee under trust arrangements are excluded when calculating the NTA position. However, pursuant to Section 16 of the Regulation, the MFR framework must be applied to the financial information of the trust and any QBCC Net Tangible Asset deficiency is a liability in calculating the Net Tangible Asset position of the trustee.
QBCC requires financial statements for both the trustee and the trust for the same reporting year. Whilst all trading is usually completed under the trust, the trustee company is still required to provide signed financial statements to confirm its net asset position.
When calculating the NTA of a licensed company that is trustee for a trust, do you include the trustee company assets?
Yes. NTA for a company that is a trustee for a trust can include:
- Assets and liabilities of the trustee company, exclusive of the trust; or
- In combination with assets assured by way of Deed from one or more of the following:
- Beneficiary of the trust
- Director of the licensee; or
- Associated company of the licensee.
Assets and liabilities held in the trust cannot be taken into consideration in determining NTA and cannot be assured to the applicant through a Deed. However, pursuant to Section 16 of the Regulation, the MFR framework must be applied to the financial information of the trust and any QBCC Net Tangible Asset deficiency is a liability in calculating the Net Tangible Asset position of the trustee.
The current ratio calculation depends on your business structure:
- For individuals – personal current assets and current liabilities
- For partnerships – a combination of the partnership's and the licensed partner's current assets and current liabilities
- For trusts – a combination of the trust's and the trustee's current assets and current liabilities
- For companies – the current assets and current liabilities of the company
- For consolidated group of companies – the current assets and current liabilities (whichever is being relied upon) from either the:
- consolidated group, or
- closed group.
The licensee has $2 current assets and no current liabilities. The trust or partnership has $10,000 current assets and $8,000 current liabilities. The calculation is determined by the total of all current assets, divided by the total of all current liabilities: $10,002 / $8,000 = 1.25:1
All related entities providing financial information i.e. related entities owing loans to a licensee, the trust through which the trustee company trades, or the covenantor providing financial information to assure a Deed of Covenant and Assurance, are assessed on the same basis - this means financial information provided for related entities, trusts and covenantors are not to include intangible, disallowed or uncollectible assets in calculations, and cannot remove any liabilities from calculations under any circumstances.
The licensee must provide the balance sheet (at a minimum) of the related entity, to determine collectability of the related entity asset loan owing to a licensee.
Evidence of collectability is by way of balance sheet or statement of financial position for related entity (not Div 7A loan agreements).
For the loan to be considered collectible the related entity, at the same balance sheet date, must hold a net tangible asset position of at least $0 and have a current ratio of at least 1:1.
In calculating the related entities net tangible asset position and current ratio, any disallowed or intangible assets must be excluded from the related entities financial position. Disallowed assets are identified in Section 17 of the Queensland Building and Construction Commission (Minimum Financial Requirements) Regulation 2018.
If directors owe money to the company as an asset, collectability of those loans also need to be determined, by way of a statement of financial position. The director would need a net tangible asset position of at least $0 and a current ratio of at least 1:1 for the loan to be considered collectible.
Repayment of a loan through the payment of future dividends from the licensee is not evidence of collectability, as the payment of the dividend reduces the licensee's NTA position by an equivalent amount.
Related entity liability loans cannot be deducted from the calculations of net tangible assets or current ratio under any circumstances.
AASB 101 states "an entity shall not offset assets and liabilities or income and expenses, unless required or permitted by an Australian Accounting Standard. Therefore, related entity liability loans cannot be "offset" against related entity asset loans unless permitted to do so by accounting standards (ie AASB 124).
We rely upon financial information provided for licensees, as being true and correct and therefore reliable. We will not usually accept a second set of financial information for the same reporting date but showing different figures, unless it is accompanied by full disclosure of new information that has come to the accountant's attention since completing the initial statements (and not due to deficiencies in the financial information being raised by QBCC).
Any changes to the financial statements need to be in accordance with the relevant accounting standards (ie AASB 108 or AASB 110).
An unpaid present entitlement is usually a current liability in the trust, unless the parties have entered into a binding agreement for its repayment (e.g. div 7A loan). This is because the trust does not have an unconditional right to defer settlement outside twelve months.
In the case of a UPE being recorded as a current asset, QBCC would need information to confirm previous years trust distributions, including a copy of resolution relating to the current years distributions or a copy of the beneficiary account (breakdown) from the ledger.
For UPEs that are recorded as assets, these are treated by QBCC in the same way as related entity asset loans, and evidence of collectability by way of balance sheet is required.
Usually, a company's internal management accounts will list an asset such as motor vehicle or plant & equipment at its value that it could be reasonably sold for. This is the value that could be received if the company was to sell the asset at any given moment.
The depreciated or written down value of these assets will look completely different. This usually happens once the relevant accounting standards have been applied to the financial statements (ie AASB 116), and the finalised financial statements will then show what an asset is worth for tax purposes.
This can cause issues with a company's financial statements when reporting to QBCC, as the financial statements will be shown with lesser values attributed to the assets.
For QBCC's annual financial reporting obligations, we do accept internal management accounts being provided for Self-Certifying Category 1 and 2 (SC1and SC2) licensees, and Categories 1-3. This means, we would accept the financials at book value (for annual reporting).
When providing financial information for MFR Requirements (ie to apply for a licence, or upgrade your MR), the financial statements need to have all relevant accounting standards, which means the assets would likely be written down for tax depreciation reasons.
If applying accounting standards, to revalue an item of property, plant or equipment, the correct accounting standard must apply (i.e. AASB 116 / AASB 136 / AASB 1041), and if an item of property, plant & equipment is revalued, the entire class of property, plant & equipment to which that asset belong needs to revalued. The revalued amounts need to included in the company's financial statements, which should also reflect the increase in income as well as accumulated in equity under the heading of revaluation surplus.
An excluded accountant is an accountant who has received an exclusion notice from the QBCC. They cannot prepare MFR reports for a period of three years.
An accountant can be excluded by the QBCC if:
- within the previous 3 years, the accountant has:
- given information they knew to be false or misleading to a licensed contractor, or to the QBCC, in relation to a licensed contractor’s satisfaction of the MFR or
- failed to comply with the MFR in relation to information required to be given to the QBCC
- not complied with a requirement in a previous exclusion notice given to the accountant.
Excluded accountants will not be able to prepare MFR reports for QBCC licensees [or applicants] for a period of 3 years
If a licensee uses an excluded accountant to prepare their MFR report, the QBCC will require the licensee to resubmit a new report prepared by a qualified accountant.
To find out if an accountant is an excluded accountant, you can check the register of excluded accountants.