diff --git a/lib/gitlab/ci/config/extendable.rb b/lib/gitlab/ci/config/extendable.rb
deleted file mode 100644
index dea0dbdb44b..00000000000
--- a/lib/gitlab/ci/config/extendable.rb
+++ /dev/null
@@ -1,31 +0,0 @@
-module Gitlab
-  module Ci
-    class Config
-      class Extendable
-        include Enumerable
-
-        ExtensionError = Class.new(StandardError)
-
-        def initialize(hash)
-          @hash = hash
-        end
-
-        def each
-          @hash.each_pair do |key, value|
-            next unless value.key?(:extends)
-
-            yield key, value.fetch(:extends).to_sym, value
-          end
-        end
-
-        def extend!
-          @hash.tap do
-            each do |key, extends, value|
-              @hash[key] = @hash.fetch(extends).deep_merge(value)
-            end
-          end
-        end
-      end
-    end
-  end
-end
diff --git a/lib/gitlab/ci/config/extendable/collection.rb b/lib/gitlab/ci/config/extendable/collection.rb
new file mode 100644
index 00000000000..4ffc4d91c82
--- /dev/null
+++ b/lib/gitlab/ci/config/extendable/collection.rb
@@ -0,0 +1,34 @@
+module Gitlab
+  module Ci
+    class Config
+      module Extendable
+        class Collection
+          include Enumerable
+
+          ExtensionError = Class.new(StandardError)
+
+          def initialize(hash, context = hash)
+            @hash = hash
+            @context = context
+          end
+
+          def each
+            @hash.each_pair do |key, value|
+              next unless value.key?(:extends)
+
+              yield Extendable::Entry.new(key, value, @context)
+            end
+          end
+
+          def extend!
+            each do |entry|
+              raise ExtensionError unless entry.valid?
+
+              @hash[entry.key] = entry.extend!
+            end
+          end
+        end
+      end
+    end
+  end
+end
diff --git a/lib/gitlab/ci/config/extendable/entry.rb b/lib/gitlab/ci/config/extendable/entry.rb
new file mode 100644
index 00000000000..a39fa127e80
--- /dev/null
+++ b/lib/gitlab/ci/config/extendable/entry.rb
@@ -0,0 +1,51 @@
+module Gitlab
+  module Ci
+    class Config
+      module Extendable
+        class Entry
+          attr_reader :key
+
+          def initialize(key, value, context, parent = nil)
+            @key = key
+            @value = value
+            @context = context
+            @parent = parent
+          end
+
+          def valid?
+            true
+          end
+
+          # def circular_dependency?
+          #   @extends.to_s == @key.to_s
+          # end
+
+          def base
+            Extendable::Entry
+              .new(extends, @context.fetch(extends), @context, self)
+              .extend!
+          end
+
+          def extensible?
+            @value.key?(:extends)
+          end
+
+          def extends
+            @value.fetch(:extends).to_sym
+          end
+
+          def extend!
+            if extensible?
+              original = @value.dup
+              parent = base.dup
+
+              @value.clear.deep_merge!(parent).deep_merge!(original)
+            else
+              @value.to_h
+            end
+          end
+        end
+      end
+    end
+  end
+end
diff --git a/spec/lib/gitlab/ci/config/extendable/collection_spec.rb b/spec/lib/gitlab/ci/config/extendable/collection_spec.rb
new file mode 100644
index 00000000000..453c7357561
--- /dev/null
+++ b/spec/lib/gitlab/ci/config/extendable/collection_spec.rb
@@ -0,0 +1,122 @@
+require 'fast_spec_helper'
+
+describe Gitlab::Ci::Config::Extendable::Collection do
+  subject { described_class.new(hash) }
+
+  describe '#each' do
+    context 'when there is extendable entry in the hash' do
+      let(:test) do
+        { extends: 'something', only: %w[master] }
+      end
+
+      let(:hash) do
+        { something: { script: 'ls' }, test: test }
+      end
+
+      it 'yields the test hash' do
+        expect { |b| subject.each(&b) }.to yield_control
+      end
+    end
+
+    context 'when not extending using a hash' do
+      let(:hash) do
+        { something: { extends: [1], script: 'ls' } }
+      end
+
+      it 'yields invalid extends as well' do
+        expect { |b| subject.each(&b) }.to yield_control
+      end
+    end
+  end
+
+  describe '#extend!' do
+    context 'when a hash has a single simple extension' do
+      let(:hash) do
+        {
+          something: {
+            script: 'deploy',
+            only: { variables: %w[$SOMETHING] }
+          },
+
+          test: {
+            extends: 'something',
+            script: 'ls',
+            only: { refs: %w[master] }
+          }
+        }
+      end
+
+      it 'extends a hash with a deep reverse merge' do
+        expect(subject.extend!).to eq(
+          something: {
+            script: 'deploy',
+            only: { variables: %w[$SOMETHING] }
+          },
+
+          test: {
+            extends: 'something',
+            script: 'ls',
+            only: {
+              refs: %w[master],
+              variables: %w[$SOMETHING]
+            }
+          }
+        )
+      end
+    end
+
+    context 'when a hash uses recursive extensions' do
+      let(:hash) do
+        {
+          test: {
+            extends: 'something',
+            script: 'ls',
+            only: { refs: %w[master] }
+          },
+
+          something: {
+            extends: '.first',
+            script: 'deploy',
+            only: { variables: %w[$SOMETHING] }
+          },
+
+          '.first': {
+            script: 'run',
+            only: { kubernetes: 'active' }
+          }
+        }
+      end
+
+      it 'extends a hash with a deep reverse merge' do
+        expect(subject.extend!).to eq(
+          '.first': {
+            script: 'run',
+            only: { kubernetes: 'active' }
+          },
+
+          something: {
+            extends: '.first',
+            script: 'deploy',
+            only: {
+              kubernetes: 'active',
+              variables: %w[$SOMETHING]
+            }
+          },
+
+          test: {
+            extends: 'something',
+            script: 'ls',
+            only: {
+              refs: %w[master],
+              variables: %w[$SOMETHING],
+              kubernetes: 'active'
+            }
+          }
+        )
+      end
+    end
+
+    pending 'when invalid `extends` is specified'
+    pending 'when circular dependecy has been detected'
+  end
+end
diff --git a/spec/lib/gitlab/ci/config/extendable_spec.rb b/spec/lib/gitlab/ci/config/extendable_spec.rb
deleted file mode 100644
index a23fe560202..00000000000
--- a/spec/lib/gitlab/ci/config/extendable_spec.rb
+++ /dev/null
@@ -1,63 +0,0 @@
-require 'fast_spec_helper'
-
-describe Gitlab::Ci::Config::Extendable do
-  subject { described_class.new(hash) }
-
-  describe '#each' do
-    context 'when there is extendable entry in the hash' do
-      let(:test) do
-        { extends: 'something', only: %w[master] }
-      end
-
-      let(:hash) do
-        { something: { script: 'ls' }, test: test }
-      end
-
-      it 'yields the test hash' do
-        expect { |b| subject.each(&b) }
-          .to yield_with_args(:test, :something, test)
-      end
-    end
-
-    pending 'when not extending using a hash'
-  end
-
-  describe '#extend!' do
-    context 'when a hash has a single simple extension' do
-      let(:hash) do
-        {
-          something: {
-            script: 'deploy',
-            only: { variables: %w[$SOMETHING] }
-          },
-          test: {
-            extends: 'something',
-            script: 'ls',
-            only: { refs: %w[master] }
-          }
-        }
-      end
-
-      it 'extends a hash with reverse merge' do
-        expect(subject.extend!).to eq(
-          something: {
-            script: 'deploy',
-            only: { variables: %w[$SOMETHING] }
-          },
-          test: {
-            extends: 'something',
-            script: 'ls',
-            only: {
-              refs: %w[master],
-              variables: %w[$SOMETHING]
-            }
-          }
-        )
-      end
-    end
-
-    pending 'when a hash recursive extensions'
-
-    pending 'when invalid `extends` is specified'
-  end
-end