According to accounting principles, when a lease modification occurs that was originally classified as an operating lease, the lessor does not reassess the classification criteria for the modified lease. The arrangement is not treated as a new lease, and any prepaid or accrued lease payments from the original lease are included in the lease payments for the modified lease. Therefore, the correct statement is:

Upon modification, the classification criteria are not reassessed for operating leases.

This aligns with the guidance in accounting standards for lease modifications, which generally require that the lessor account for the modification as a continuation of the existing lease, unless the modification meets specific criteria to be treated as a separate lease.