- All head contractors who withhold retention money in commercial construction contracts will be affected and need to act now.
- Systems and processes will need to change to ensure compliance with the new requirements.
- These FAQs can assist members to be better placed to account for retention money under the new regime.
The Construction Contracts (Retention Money) Amendment Act 2023 received the Royal Assent on 5 April 2023 and is effective 5 October 2023. It amends the Construction Contracts Act 2002 retention money regime and affects all head contractors who withhold retention money in relation to a commercial construction contract.
We are hearing that finance teams are being given the responsibility to implement these new rules, and this has prompted them to ask many questions. To address these, CA ANZ has published a set of FAQs. Areas covered in these FAQs include key terms, the key changes, accounting implications and implementation considerations. There is also an illustrative report to help comply with the new reporting requirements.