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QBCC Licensees Beware: New Financial Statement Requirements from July 2022

QBCC: General Purpose Financial Statements and you

Kerry Bebendorf

Queensland Building and Construction Commission (QBCC) is responsible for licensing builders and trade contractors in Queensland, Australia. To be eligible for a QBCC licence, applicants, or licensees, must meet certain minimum financial requirements.
 
The QBCC confirmed that from 1 July 2022, licensees must provide General Purpose Financial Statements (GPFS) when either: 
  • submitting a Minimum Financial Requirements (MFR) Report to adjust reported Net Tangible Assets (NTA) or Allowable Annual Turnover (licence categories 1-7), or
  • complying with annual reporting requirements (licence categories 4-7).
 
Why the change?
The change in requirement is due to the amendments made to the standards set by the Australian Accounting Standards Board (AASB), and that the QBCC regulations require financial information to be prepared in accordance with the prescribed accounting standards set out by the AASB.
 
The changes were as a result of two new standards specifically:
  • AASB 2020-2 Removal of Special Purpose Financial Statements (SPFS) for Certain For-Profit Private Sector Entities, which removed SPFS from Australian Accounting Standards, and
  • AASB 1060 General Purpose Financial Statements (GPFS) – Simplified Disclosures for For-Profit and Not-For-Profit Tier 2 Entities, which provided a simplified disclosure framework to report under.
 The changes were announced in March 2020, around the same time the COVID-19 pandemic took off, and were likely overlooked as businesses dealt with more pressing pandemic related operational issues.
 
What does it mean for QBCC licensees?
For all licensees (Category 1-7), you will be required to provide signed financial statements when lodging an MFR Report. MFR Reports are typically required when:
  • applying for a licence
  • seeking an increase to allowable annual turnover
  • a reportable decline in NTA has occurred
  • a significant change to ownership or officeholders in the business or
  • demonstrating MFR compliance in response to a QBCC audit
In Queensland, Category 1 and above licensees are required to prepare general purpose financial statements that comply with the Australian Accounting Standards, including a true and fair view of the licensee's financial position, performance, and cash flows.
 
What does a General Purpose Financial Statement include?
General purpose financial statements typically include components;
  1. Balance Sheet: assets, liabilities, and equity as at the end of the reporting period
  2. Profit and Loss Statement: revenue, expenses, and profit or loss for the reporting period
  3. Cash Flow Statement: cash inflows and outflows for the reporting period and
  4. Notes to the Financial Statements: additional information about the licensee's accounting policies, significant accounting estimates and judgments, and other relevant information

Talk to your trusted advisor
The full requirements of Australian Accounting Standards are extremely complex. 
 
Preparing general purpose financial statements can be a complicated process, and it is recommended that QBCC licensees seek the advice of a qualified accountant or auditor to ensure their financial statements are accurate and compliant with the relevant accounting standards.
 
A Moore Australia advisor can assist with providing advice on your requirements to sustain your QBCC license, preparing financial reports that comply with the Australian Accounting Standards and provide lodgements on your behalf.
 
Contact us to start discussing your needs today.
 
businessgeneral purpose financial statementsGPFSlicencingQBCC

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