Ind AS 115 |Contract Modification |Continuation of Existing Contract | Single Performance Obligation

Contract Modification — Continuation of Existing Contract When does this happen? When: Remaining goods/services are NOT DISTINCT from Goods/services already transferred Meaning of “Not Distinct” Customer cannot benefit from: past work separately and future work separately Both are connected parts of one combined project. Single Performance Obligation Old work + New work = One single performance obligation Example: Furniture/interior project Earlier work + additional work All part of one integrated job Treatment ❌ Not treated as a separate contract ✅ Treated as continuation of existing contract Accounting Treatment Use: Cumulative Catch-up Basis Meaning: Recalculate total contract revenue Recalculate progress till date Adjust difference immediately Simple Formula Idea Revised Total Revenue ÷ Revised Total Work → Find updated revenue till date → Pass adjustment entry Key Exam Line When remaining goods or services are not distinct from goods or services already transferred, the modification is treated as a continuation of the existing contract and accounted for on a cumulative catch-up basis. One-Line Revision One integrated project → One performance obligation → Continue existing contract → Cumulative catch-up adjustment Accounting#Finance#ContractModification#RevenueRecognition#IFRS15#BusinessAccounting FinanceEducation CumulativeCatchUp