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30 January 2019
The Minimum Financial Requirements (MFR) framework will be implemented in stages. Phase 1 commenced on 1 January 2019.
The new regulation:
- Reintroduces annual reporting for all licensees
- Changes how category 4–7 licensees report decreases in Net Tangible Assets (NTA)
- Clarifies how assets are to be treated.
Existing category 4–7 licensees are to provide their most recent financial statements to the QBCC by 31 March 2019, while all other licenses have until 31 December 2019 to report.
The requirement for category 4–7 licensees to report a 20 per cent decrease in NTA will take effect from a licensee’s first annual reporting day. This is to ensure that category 4–7 licensees are not immediately in breach.
The QBCC will allocate an ongoing annual reporting day for licensees.
The QBCC has already started receiving financial statements from licensees through the MyQBCC portal.
The remainder of the reforms will be implemented as part of Phase 2, commencing 1 April 2019. Key reforms include:
- Providing for a more robust assessment of capacity to pay debts (‘balanced scorecard’ approach) for category 4–7 licensees
- Requiring SC1 and SC2 licensees to declare their current ratio
- Enabling the QBCC to seek independent verification of financial information
- Specifying that any material changes in MFR reports require updated financial information
- Requiring more detailed information about a covenanter’s financial position
- Clarifying how related entity loans are assessed
- Increasing the maximum revenue threshold for self-certifying licensees from $600,000 to $800,000.
Changes to the QBCC Act
To support the new MFR framework, the QBCC Act will be amended to include executive officer liability, escalating penalties for failing to meet requirements and new penalties for failing to provide financial information. These changes will ensure that the QBCC can effectively regulate the new requirements.
The QBCC is holding information sessions throughout February about the new reporting requirements and to demonstrate how licensees can lodge their financial information. The sessions are scheduled for the following dates, with the QBCC taking all registrations:
|Brisbane Central (West End)||13 February|
|Sunshine Coast (Maroochydore)||18 February|
|Brisbane South (Springwood)||20 February|
|Brisbane North (Kallangur)||21 February|
|Gold Coast (Nerang)||27 February|
The QBCC will also be holding a session for accountants on 15 February 2019.
For more information about Minimum Financial Reporting, visit the QBCC website.