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As a builder or tradie in Queensland, you would be familiar with the QBCC and their annual reporting requirements but recent changes are leaving many licensees underprepared.
An MFR Report must provide an accurate Work In Progress (WIP) figure.
Now the Australian Accounting Standard clearly states that the WIP is not only a compulsory inclusion within the Minimum Financial Requirements (MFR) Report but it must also be calculated according to the Accounting Standard’s methodology.
Whilst this new requirement does impose a higher degree of compliance, the WIP is actually a critical accounting entry for any business owner wanting to see their true profit position.
Have I satisfied the Current Ratio?
The current ratio calculation depends on your business structure:
Individuals; personal current assets and current liabilities
Partnerships; a combination of the partnership’s and the licensed partner’s current assets and current liabilities
Trusts; a combination of the trust’s and the trustee’s current assets and current liabilities
Companies; the current assets and current liabilities of the company
How do I determine Net Tangible Assets (NTA)?
Net Tangible Assets (NTA) is the total assets of a business, less any intangible asset such as goodwill, patents, and trademarks, less all liabilities. Your NTA will determine the maximum revenue (MR) that you can earn in the coming year.
Note that the following assets are NOT counted in the calculation:
personal furniture
investments or shares in companies that aren’t publicly listed
investments values using equity accounting methodology
units in trusts that are not publicly listed
trade or barter dollars
assets assured to another licensed entity
boats, ships, jet skis, planes, helicopters, racehorses and racing cars
collectors’ items such as paintings, stamps, coins
contingent assets
unvested superannuation benefits
life or income protection insurance policy benefits
Can I exceed my Maximum Revenue (MR)?
You can exceed your Maximum Revenue (MR) by up to 10 per cent without obtaining prior approval from QBCC. If you are going to exceed your MR by more than 10 per cent, you must provide to QBCC either a new financial declaration or Minimum Financial Requirements Report that supports the increase. This must be done prior to exceeding the MR.
To increase or decrease turnover over $800,000, a Minimum Financial Report would need to be prepared by an accountant.
Our team can remove the hassle of any QBCC compliance and help you stay on track with requirements, allowing you more time to focus on your business and what you love doing most.
We can review your financials before your lodge.
Give us a call on 07 5500 0898 or email info@mjmaccountants.com.au.
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