Understanding Accounting
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Misconception · MIS:modification-reuses-old-cash-flow-schedule-unchanged

Mistaken idea “A modification reuses the old cash-flow schedule unchanged”

Mistaken reasoning: Someone avoids derecognition but ignores revised cash flows, fees, and subsequent yield accounting.

Updated Aug 21, 2026 Review due Nov 8, 2026

Why this is mistaken

Preserve the old liability, then map revised cash flows and fees and apply the supplied continuation accounting.

Where to watch

When this mistake may appear

  • A transaction is supplied as a modification.
Check your work

Your work may contain this mistake if:

  • Keep the old liability and continue the old rows without change.