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You can modify the non-magical special material items that appear in the Specific Weapon and Armor sections. Such as Adamantine Battleaxe, Darkwood Buckler or Dragonhide Plate.
You can't modify the magical items that appear in the Specific Weapon and Armor sections. Such as Celestial Armor, Rhino Hide or Dagger of Venom.
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A custom magical item, for regards to what is not legal in PFS is something that has a special ability that does not have a price, or a modified specific item.
For example, the Sun blade, which is a bastard sword keyed to short sword feats that has a higher enhancement bonus against evil creatures and deals double damage against undead and other negative energy plane creatures has several special abilities that do not have a cost associated with them. If you were to try to upgrade the Sun blade from +2 to +3, that would make it a custom magical item, likewise, if you wanted a Dwarven Axe that is keyed to hand axe feats, it would be a custom magical item as well.
However, the item you mention, a +1 Bashing Heavy Shield, is not a custom item, Bashing is a +1 special ability and can be placed on any shield, therefore the shield can be upgraded as normal.
When creating or upgrading a magical item, you can only use special abilities which have associated costs, these special abilities may be found on pages 468-472 of the core rulebook for weapons, and 462-464 of the core rulebook for armor, or 134-149 of Ultimate Equipment for weapons, and 114-123 of Ultimate Equipment for armor. So long as the total enhancement bonus does not exceed +10, such an item is not a "custom magical item", even if it is made from a special material such as mithral. Special abilities do exist in other books, and some special abilities are not PFS legal, but I do not have the time to cover where all the PFS legal special abilities are and list out which specific ones are not legal, please see the additional resources for more information.
