BC76 The boards observed that previous revenue recognition requirements did not include a general framework for accounting for contract modifications. Therefore, the boards decided to include requirements regarding contract modifications in IFRS 15 to improve consistency in the accounting for contract modifications. As the revenue recognition model developed, the boards proposed different approaches to account for contract modifications. However, each approach was developed with the overall objective of faithfully depicting an entity's rights and obligations in the modified contract. The boards concluded that to faithfully depict the rights and obligations arising from a modified contract, an entity should account for some modifications prospectively and for other modifications on a cumulative catch-up basis.
BC77 The boards decided that a contract modification should be accounted for prospectively if the additional promised goods or services are distinct and the prici
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