Change in contractual cash flows

When change in the terms is altering the contractual cash flows, should the SPPI test be carried out afresh?

A proper assessment should be made afresh whenever there could be contractual term potentially changing the timing or amount of the contractual cash flows. A typical example is where a financial asset can be prepaid before the date of maturity or whether its term can be extended. For the purpose of this assessment, the contractual cash flows that could arise after the change in the contractual cash flows should be compared with the contractual cash flows before such changed contractual provisions. The reader is advised to go through examples provided in this chapter where SPPI test is passed pursuant to the change in the terms modifying contractual cash flows and examples where the test is not met after such change in the contractual terms.

Ind AS Accounting Standards