Minimum financial requirements

The minimum financial requirements (MFR) framework applies to contractor licensees in the building and construction industry and is regulated by the Queensland Building and Construction Commission (QBCC).

MFR Amendment Regulation 2024

Under the MFR framework, contractor licensees are required to report significant changes in circumstances, which may trigger the need for an MFR report so the QBCC can assess whether the licensee continues to have sufficient working capital and can cover their debts.

Other examples of when an MFR report may be required include increasing maximum revenue or reporting a decrease in net tangible assets (NTA).

From 1 July 2021, the Australian Accounting Standards Board removed the ability for some for-profit entities, including contractor licensees in financial categories SC1, SC2, 1, 2 and 3, to prepare Special Purpose Financial Statements (SPFS) as part of their MFR reports.

As a result, all licensees were required to prepare General Purpose Financial Statements. This increased costs for category SC1, SC2, 1, 2 and 3 licensees.

The Queensland Government listened to industry concerns about these costs and amended the MFR Regulation to reinstate the use of SPFS for those licensees.

Simpler requirements apply from 16 February 2024 for contractor licensees in financial categories SC1, SC2, 1, 2 and 3, with the QBCC again able to accept SPFS as part of an MFR report.

This change will also apply to an MFR report for the quarter ending 31 December 2023, and for licensees applying to change their financial category to one of the affected financial categories.

This will save affected licensees thousands of dollars in preparing MFR reports.