Waste heat recovery (WHR) is an important measure to improve the utilization efficiency of primary energy and alleviate the scarcity of fossil fuels, and converting thermal energy into electrical energy by means of thermodynamic cycles is regarded as the best choice for WHR because of convenience in the use and transmission of electrical energy. Various thermodynamic cycles have been constantly proposed and proved to be applicable for WHR, which has led to a controversy about the most suitable cycles. Although some studies have proposed their own opinions by comparing the thermodynamic or economic performance of different cycles, this controversy has not been completely resolved due to the lack of research from the perspective of the ideal cycle. Therefore, a new ideal cycle that could solve difficulties hidden in the implementation of existing ideal cycles is proposed in this study. And a real cycle that includes over-expansion, recompression, and internal heat recovery is derived by gradually considering the real factors on the basis of the new ideal cycle. Then, to implement the above real cycle, a modified transcritical carbon dioxide power cycle is proposed to recover waste heat from the flue gas of 500 ℃. Thermodynamic analysis of the modified cycle is carried out, and results show that the maximum net work output and corresponding heat recovery rate of flue gas reach 109.99 kW and 81.5% under the considered conditions. Compared with the traditional transcritical carbon dioxide power cycle with recuperator, the net work output, heat recovery rate of flue gas, thermal efficiency, and exergy efficiency of the modified cycle improves by 33.6%–192.3%, 28.6%–39.5%, 3.9%–109.5%, and 11.4%–122.3%, respectively, under the same conditions. This indicates that the modified cycle performs better and the proposed ideal cycle can guide the research of WHR.