---
title: Contract Modification (Prospective)
description: A change to the scope or price of a contract that is treated as a completely new, separate contract going forward. This occurs when additional distinc...
sidebar_position: 8
tags: ['asc-606', 'Contracts']
---

# Contract Modification (Prospective)

## The ASC 606 Standard

A change to the scope or price of a contract that is treated as a completely new, separate contract going forward. This occurs when additional distinct goods are promised at their standalone selling prices.

## The Real-World Scenario

Six months into a one-year deal, your customer decides to buy 50 additional user licenses at your standard current market rate.

## The Spreadsheet Breaking Point

Manually closing out old amortization schedules and building new ones for mid-term upgrades without corrupting historical data is nearly impossible.

## The Hidden Cost to the Bottom Line

Broken modification schedules disrupt accurate reporting of expansion ARR, confusing investors regarding actual growth metrics.

## How GAAPX Eliminates the Risk

Automatically identifies the modification type and generates a new, clean revenue schedule from the exact modification date.