The Australian Accounting Standards have recently changed, and anyone in the 'Construction Industry' and reporting annually to QBCC must now comply with these Standards.   It is the change of Standards that is responsible, not a change in QBCC reporting rules.

Contractors are required to lodge key financial information for the most recent reporting year by 31 December to show the business is financially sustainable.   The type of information depends on the financial category, there are nine categories, and these are defined by the maximum revenue earned and the net tangible assets needed to support that revenue.

However, a Minimum Financial Requirements report (MFR) is mandatory where either turnover will increase by more than 10% over the 'annual allowable turnover', or net tangible assets of the firm reduces by more than 20%.

The two standards that must be followed are:

AASB 2020

Presentation of Liabilities (Current and Non-Current)

AASB 1060

Removal of Special Purpose Financial Statements, and use of General Purpose Financial Statements.

The Standards require an independent accountant to sign off on the financials, and to prepare Profit and Loss, Balance Sheet, Statement of Cash Flow, Creditors' Report, and Notes and Accounting Policies.   In the past, not all of these may have been required, or not to this standard.

The change is likely to impact many builders and contractors as their circumstances have fluctuated in the recent challenging economic conditions, so they may also have to lodge a Minimum Financial Requirements (MFR) report to show the business remains solvent and financially capable of taking on new work.

Annual Reports are due by 31 December, which could require compliance with these standards, so more time may be required depending on the state of the records and financial reports.   It may be necessary to also prepare an MFR report where the expected annual turnover increase will be more than 10% of past turnover, or net tangible assets have reduced in value, (which means reduced turnover limits will apply).   June accounts can't be used in December and must be more current, being not more than 4 months before the date of the Report is signed.   The MFR may require verification work.

In summary, allow more time for preparation of the financials and reports for QBCC, and because of the detail now required more checking and disclosure may be necessary:

1. Test the June financials now to ensure the solvency tests are met for the 2022 Annual Return.

2. Consider the net assets required if expecting an increase in annual turnover for 2023.

3. Allow extra time to prepare the financials to the required standard.