Deloitte
Accounting Research Tool
...
Chapter 9 — Contract Modifications

9.3 Reassessing Step 1 Upon a Contract Modification

9.3 Reassessing Step 1 Upon a Contract Modification

Contract modifications tend to occur because despite all of the planning that an entity and its customer can do, unforeseen challenges can cause business needs to change. A modification could change the terms of a contract so significantly that the modified contract does not resemble the original contract. Once a contract is modified, a company might question whether the contract still meets the contract existence criteria in step 1 (see Chapter 4).