Ind AS 115 Contract Modification Explained with Practical Example | CA Final FR Capsule | 2027

Contract Modification as: a change in the scope of the contract, a change in the price of the contract, or a change in both. In simple words, when the original terms and conditions of a contract are changed after the contract has already been agreed upon, it is called a contract modification. Example: On 2 April, a contract was finalized: Seller will supply 100 glasses Price = ₹50 per glass Total consideration = ₹5,000 On 12 April, the customer requested: 70 additional glasses at ₹49 per glass The seller agreed. Now observe what changed: Scope changed → additional quantity of goods was added. Consideration/price changed → customer will pay an additional ₹3,430. Therefore, this is a Contract Modification. The key point is: Any change in the terms and conditions of an existing contract—whether related to quantity, price, goods, services, or both—is treated as a contract modification. #IndAS115 #ContractModification #CAInter #CAStudents #Accounting #RevenueRecognition #CharteredAccountancy #CAInterAccounts #AccountingStandards #CommerceStudents #CAFinal #IFRS15 #StudyReels #FinanceEducation #Accounts #CAExam #CommerceReels #AuditAndAccounts #LearningReels #CAIndia