If a contract modification does not create a separate contract, it is accounted for using
A) either a cumulative catch-up adjustment or a retrospective approach.
B) either a cumulative catch-up adjustment or a prospective approach.
C) either a retrospective approach or a prospective approach.
D) either a cumulative catch-up adjustment, a prospective approach, or a retrospective approach.

Question

Quizplus · Accepted Answer

When a contract modification does not create a separate contract, it is accounted for using either a cumulative catch-up adjustment or a prospective approach, according to accounting standards.

If a Contract Modification Does Not Create a Separate Contract