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ARTICLE · 05 OCTOBER 2015

E-Alert: Building and Construction E-Alert No.3 of 2015 – The Net Tangible Assets (NTA) Issue

Broadley Rees Hogan Lawyers
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The NTA formula is from the Queensland Building and Construction Commission's Minimum Financial Requirements Policy.

AustraliaReal Estate and Construction
Brent Turnbull (Formerly With Broadley Rees Hogan Lawyers)
Brent Turnbull (Formerly With Broadley Rees Hogan Lawyers)
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In the past two e-alerts we have referred to the concept of Net Tangible Assets (NTAs), but what are they and why are they relevant?

In this e-alert, we will explore what NTAs are and why they are relevant to your business.

So what are NTAs?

NTAs are calculated using the following formula (from the Queensland Building and Construction Commission's Minimum Financial Requirements Policy (Policy)):

NTA = Assets – Liabilities – Intangible Assets – Disallowed Assets

Each of these terms is defined in the Policy.

What is the impact of NTAs?

NTAs are significant because an entity's NTAs are used to calculate an entity's Maximum Revenue ie the maximum amount of revenue that an entity is entitled to earn in a financial year (whether from construction related activities or not).

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