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3)  The assessment performed under this step will result in the proposed modification being categorized under one of the following (refer to Part III, Section 5.3.2, Major Modification Category):
i)  Significant change. The ACD assumes at this point that the proposed modification would have to demonstrate compliance with the latest design standards for all affected areas of the product. The next step is to assess whether such requirement is cost-effective (practical).
ii)  Not significant change. The ACD should allow the proposed modification to demonstrate compliance with the existing certification basis of the affected product. The applicant may, however, volunteer to demonstrate compliance with later amendments to the design standards of the existing certification basis. 
4)  The conclusion of this Step is the determination of the proposed modification as either “significant change” or “not significant change”. For a “not significant change”, the applicant and ACD can finalize the certification basis under g) below.
d)  Determining whether the latest standards be used for all areas affected by the modification.
1)  The proposed modification, in its entirety, is considered a significant change (under step c) above), and by policy requires demonstration of compliance with the latest design standards for all areas affected by the modification. Where an applicant accepts to use the latest design standards for all affected areas, the full intent of the airworthiness policy is deemed to have been met. The applicant is also considered to have completed some form of self-assessment that supports or address the cost-effectiveness (or practicality) of their decision to comply with the latest design standards. No further justification is needed from the applicant, and the ACD records this decision and the process of establishing the certification basis is considered concluded.
2)  There may be cases where a significant change that requires compliance with the latest design standards may be too expensive (costly) to pursue, in contrast to the extra safety benefit to be gained. In this case, the costs of compliance may discourage the installation of modifications of potential safety benefits. The ACD and applicant should engage in a detailed review of each affected area of the modification to consider prior amendment levels to the latest design standards where the increased safety can be economically justified. This aspect is consistent with the airworthiness policy of encouraging upgrade of the level of safety of aeronautical products to the greatest extent practicable. The next steps explain the process of determining the appropriate certification basis.
e)  Determining if this is an affected area. All areas affected by the proposed design change should comply with the latest requirements, unless the applicant shows otherwise under Step 6 that demonstrating compliance with such requirement would not contribute materially to the level of safety or would be impractical. The applicant should be provided an opportunity to discuss with the ACD the merits of complying with prior amendment levels to such design standards. The applicant has the burden of preparing and documenting data to support their argument for complying with other than the latest design standards. The ACD is obligated to review the data and ultimately establish the appropriate amendment level after considering the applicant’s submission. The following process involves the identification of each physical and/or functional area of the aeronautical product that is affected by the proposed modification, and determining the appropriate amendment level (other than the latest) of the design standards that should be applied to each affected area. It is important that the effects of such change on other systems, components, equipment, or appliances of the product are properly assessed because areas that have not been changed may also be affected.
　
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