CERTYNEX IFRS ACADEMY

Codexa is developing a loan management system for a bank; the contract is a single performance obligation, satisfied over time and 60% complete. The parties approve the addition of a credit-scoring module integrated into the core of the system: it modifies the architecture already delivered and can only work with it. The price increases by an amount below the stand-alone selling price of such a module. How does Codexa account for this modification?

It treats the modification prospectively as a new contract covering the module and the rest of the system, without changing the revenue already recognised.

It accounts for the module as a separate contract, since the customer has approved a price increase.

It restates the financial statements of prior periods to reflect the new price from the start of the contract.

It recognises a cumulative catch-up adjustment to revenue, reflecting the new price and the new measure of progress.