Date posted: 14/12/2022

Joint advocacy on QBCC MFR requirements

On behalf of members, the Joint Accounting Bodies are advocating for change to the QBCC’s Minimum Financial Requirements (MFR) reporting regime

In brief

  • Members of CA ANZ, CPA Australia and IPA have been expressing concerns about the impact of current MFR reporting requirements on smaller (Category 1–3) licensees
  • The interaction of current economic conditions and the AASB’s special purpose reforms are imposing a significant and unexpected reporting burden on these entities
  • The Joint Accounting Bodies have raised these concerns with the QBCC and are identifying and discussing possible solutions

Over recent months, members of CA ANZ, CPA Australia, and the IPA have been raising concerns about the interaction of the AASB’s recent for-profit reporting reforms with the operation of the Queensland Building and Construction Commission (Minimum Financial Requirements) Regulation 2018 (the QBCC MFR Regulation). 

The challenges have arisen when Category 1–3 licencees are required to lodge a Minimum Financial Requirements (MFR) report. This is because, due to the interaction of the AASB reforms and the MFR legislative wording, this report must now be accompanied by General Purpose Financial Statements (GPFS). Lodging the internal management reports that these licensees, because of their size, can use for annual reporting purposes, is not permitted by the current MFR wording.

The nature of the MFR reporting triggers when combined with the current economic conditions, especially in the Queensland building industry, is resulting in many more Category 1–3 licensees being required to prepare MFR reports than was anticipated when the three accounting bodies were involved in the development of the legislation. That involvement saw the use of GPFS limited to Category 4–7 licencees for annual reporting purposes. The resulting need of these smaller licensees to transition their reporting to a GPFS on a one off basis for MFR reporting is now imposing a significant new reporting burden. 

In response, CA ANZ, CPA Australia, and the IPA have raised this issue with the QBCC and are working together to advocate for a resolution of this issue with them and the Queensland Government as a matter of urgency. The recommendations in our joint submission include redefining the term "signed financial statements" to permit the use of special purpose financial statements for Categories 1–3 licensees and General purpose financial statements for Categories 4–7 and providing the QBCC with the discretion to determine whether an MFR report is required when an MFR trigger is activated. The QBCC is already taking a pragmatic approach in this regard, as set out in its November 2022 newsletter.