A contract modification is accounted for as a separate (and additional) contract under IFRS 15 if both of the following conditions are met:

1. The modification results in the promise to deliver additional distinct goods or services. That means the additional goods or services are separate from the goods or services promised in the original contract, and they meet the criteria to be considered distinct.
2. The price of the contract increases by an amount of consideration that reflects the entity’s standalone selling prices of the additional promised goods or services, and any appropriate adjustments to that price to reflect the circumstances of the particular contract.

For instance, if a customer has a standing order for 100 units of a product every month, and they decide to increase their order by an additional 50 units each month, this would generally be considered a separate contract if the price per unit remains consistent with the original contract. The vendor is essentially promising to deliver additional distinct goods (the extra 50 units), and the price of the contract has increased to reflect the standalone selling prices of these additional goods.

If the modification does not meet these conditions, then it is not treated as a separate contract. Instead, the modification is accounted for as an adjustment to the existing contract, either prospectively as a termination and creation of a new contract, or as a cumulative catch-up adjustment, depending on the specifics of the modification.