When remaining goods are not distinct from those already transferred, the modification is treated as if the original contract were terminated and a new contract created. Revenue is adjusted on a cumulative catch-up basis reflecting the new blended price over all remaining units. Answer B is correct. Answer A requires the modification to meet separate contract criteria (distinct goods at standalone price), which is not met here. Answer C describes prospective treatment, which applies when remaining goods are distinct but do not meet the separate contract criteria. Answer D has no basis in ASC 606.

The modification adds distinct work and the price increase reflects the standalone selling price of the additional scope. Both criteria for a separate contract under ASC 606-10-25-12 are met. The modification is treated as a separate contract and revenue is recognized independently on the added scope. Answer A is correct. Answers B and C describe alternative modification treatments that apply only when the separate contract criteria are not met. Answer D incorrectly terminates the original contract.

ASC 606 provides three methods for accounting for contract modifications: (1) treat as a separate contract, (2) prospective treatment (new contract replaces old), and (3) cumulative catch-up. Deferring all revenue until full performance of modified terms is not a prescribed approach under ASC 606. Answer D is correct. Answers A, B, and C all describe valid modification approaches under the standard.

The additional 50 widgets are distinct (each widget is separately usable) and the price of $15 per widget reflects the standalone selling price. Both criteria for separate contract treatment under ASC 606-10-25-12 are met. Answer B is correct. Answer A applies prospective treatment, which is used when goods are distinct but the price does not reflect the standalone selling price - that condition is not present here. Answer C (cumulative catch-up) applies when goods are not distinct from those already transferred. Answer D incorrectly terminates the original contract rather than treating the modification as a new, separate contract alongside the existing one.

The modification reduces the price for the remaining 600 units to $45 each. Because the remaining goods are distinct from those already delivered, prospective treatment applies. Remaining transaction price = 600 x $45 = $27,000, recognized over the remaining 600 deliveries. Revenue already recognized on the 400 delivered units ($20,000) is not restated. Answer D is correct. Answer A uses the original price of $50 for all remaining units ($50 x 1,000 = $50,000), ignoring the modification entirely. Answer B applies the new price retroactively to all 1,000 units ($45 x 1,000 = $45,000), which would be a cumulative catch-up approach rather than prospective treatment. Answer C applies the original price to the remaining 600 units ($50 x 600 = $30,000), failing to apply the modified rate.

An unapproved change order represents variable consideration under ASC 606. Revenue is recognized only to the extent that it is probable a significant reversal will not occur when the uncertainty is resolved, using either the most likely amount or expected value method. Answer B is correct. Answer A recognizes revenue equal to costs, which describes the cost-recovery method and is not the ASC 606 approach. Answer C defers all revenue, violating the ASC 606 variable consideration guidance. Answer D ignores the additional scope and understates revenue.

A cumulative catch-up adjustment is required when a modification affects a single performance obligation (or remaining goods/services that are not distinct from those already transferred). In this case, the modification changes the consideration for work that is part of an ongoing, non-distinct performance obligation, requiring an update to the measure of progress and a catch-up in the current period. Answer A is correct. Answer B describes a separate contract (distinct + standalone price). Answer C describes prospective treatment (distinct but not at standalone price). Answer D would likely be prospective, applied to a new remaining contract period.

Under ASC 606-10-32-32, the standalone selling price is the price at which an entity would sell a promised good or service separately to a customer. It is the best evidence of standalone selling price when the good or service is actually sold separately. Answer C is correct. Answer A (catalog list price) may be used as an input but is not the definition. Answer B introduces creditworthiness criteria that do not exist in the standard. Answer D uses a historical average, which is not the prescribed definition.

ASC 606-10-25-11 states that a contract modification exists when both parties have approved the change to scope or price, and approval may occur through written, oral, or other means consistent with customary practices. An oral agreement mutually accepted by both parties qualifies. Answer A is correct. Answer B is a unilateral seller action without customer consent - no modification exists. Answer C has not been acknowledged by the seller - only one party has communicated. Answer D is an external market change, not a contract modification.

A custom home is typically a single performance obligation measured over time. Since the flooring upgrade is not distinct from the overall construction (it is part of the single combined obligation), the modification is accounted for using a cumulative catch-up adjustment. The total transaction price increases to $415,000 and the percentage of completion is remeasured, with an immediate catch-up to revenue recognized to date. Answer D is correct. Answer A requires distinct goods at standalone price. Answer B applies prospective treatment for distinct remaining goods. Answer C incorrectly dismisses the modification.