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this is Mary Duvall with the Chicago chapter of cfma today Im going to talk to you about accounting for change orders were going to start with the first question youre going to need to answer do I need to account for this change order as a separate contract the answer to that depends on whether the change order is separate and distinct deliverable not only does it need to be able to be delivered separately but the customer must derive benefit independent of your base contract if both the conditions are met you will follow the same process Im going to lay on your next slide but you will account for the change order as a separate contract if these conditions are not met the change orders conserve a part of the original contract the original performance obligation you will record it and include it with your original contract under ASC 606 change orders are accounted for as variable consideration our next step will be to determine what value are we going to use to account for this chan