CERTYNEX IFRS ACADEMY

A contract modification is not a separate contract. Which of the following statements are correct?

If the remaining goods or services are distinct from those already transferred, the modification is treated prospectively as the termination of the existing contract and the creation of a new contract.

If the remaining goods or services are distinct from those already transferred, the effect of the modification is recognised as a cumulative catch-up adjustment to revenue.

If the remaining goods or services are not distinct and form part of a partially satisfied obligation, the effect on the price and on progress is recognised as a cumulative catch-up adjustment.

When the modification combines both situations, the entity must use a single approach for the whole contract.