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How does Xray handle "versioning" of Test cases

We can handle the versioning of Tests in the same way as the versioning of other issue types in Jira. Since Xray's Tests are Jira issues, we follow the same approach so your users work in the same manner they already do.

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Another downside of using Jira versions to manage Test versions is related with the lifecycle of a Test. Jira versions are created at the project level. Hence, all issues within the project are affected by the same version numbers. 

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This is why Xray has introduced a new way of versioning Tests in v7.0. Starting from this version, it is possible to create new versions within the same Test issue. You can revert back to a specific version and view all versions of a Test case easily.

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However, this doesn't mean that you can't use Jira versions. In fact, you can use both. Although your tests may live across many versions of your project, they're made in the context of some version, most probably for the version of the requirement they aim to validate. Thus, assigning them to a Fix Version serves the purpose of tracking the specification+implementation of the test case, the first time they have been used. This way, you can also track it in the Release as one artifact that needs to be "done" (i.e., specified/reviewed/approved).

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