The Queensland Building and Construction Commission (QBCC) has stated that from 1 July 2022 all QBCC licensees, generating more than $800K per financial year, must provide General Purpose Financial Statements (GPFS) for all Minimum Financial Requirements (MFR). This is an impact from recent changes to the Australian Accounting Standards, and this change will result in an increase in both the complexity and costs associated with submitting an MFR Report.
Licensees in Categories 1-7 will now be required to provide signed General Purpose Financial Statements when lodging an MFR Report. This change does not apply to self-certifying licensees with an annual turnover less than $800,000.
The MFR Regulations require that signed Financial Statements be prepared in accordance with the approved accounting standards which include:
- a profit and loss statement
- a balance sheet
- a statement of cashflows
- aged debtors and creditors report that includes the date each invoice is due to be paid or received
- notes to the financial statements as required by the prescribed accounting standards
- a description of the measurement, within the meaning of the prescribed accounting standards, on which the financial statements are based
- the accounting policies or reports relevant to the financial statements.
Although many licensees will still only be required to prepare Special Purpose Financial Statements, this does not remove the requirement to record transactions (i.e. revenue, leases, employee obligations) in the same way larger companies are required to.
So what are General Purpose Financial Statements?
They are financial reports that businesses like large public companies are required to submit as part of their responsibilities to shareholders and other governing bodies. Unlike the Special Purpose Financial Statements that QBCC license holders have previously used until now, GPFS involve a more complex preparation process, often requiring an auditor in addition to a qualified accountant.
Who is going to prepare these reports?
In the past, many licensees and accountants were struggling with the requirement to prepare Special Purpose Financial Statements for MFR that encompassed a few specific accounting standards. Unfortunately, most external accountants will not have the knowledge or software required to prepare GPFS. Licensees will be digging further into their pockets to pay for this new level of reporting.
What does the QBCC say?
“These legislative changes are as a result of amendments to AAS, not the QBCC”.
The QBCC state the change is outside their jurisdiction. While AASB changes are not their jurisdiction, it would be a simple thing for the MFR Regulations to allow licensees not subject to GPFS for any other reason to be allowed to continue with Special Purpose Financial Statements.
What should licensees do?
There are two things licence holders should do ASAP to prepare for these changes:
- Have an upfront conversation with your current accountant. If they aren’t specialists in the industry, they may not be aware of the changes or have the in-house capability to prepare GPFS.
- Consider applying for a licence upgrade in advance (i.e. if you think your revenue growth will result in needing a higher licence category and Maximum Allowable Turnover). There is a brief window where Special Purpose Financial Statements from June 30, 2022, can be used for licence upgrades.
Feel free to contact Lana and her team at Matovic Business Accountants if you would like to discuss your business’ accounting and bookkeeping needs.
Email us at info@matovicaccounting.com.au or call (07) 3557 5721.
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