J Ltd has been trading for many years, preparing financial statements to 31 March each year. As from 1 April 2019, the company decided to adopt a new accounting policy in relation to revenue recognition. If this policy had been adopted in previous years, the company's revenue for the year to 31 March 2018 would have been £350,000 higher than previously reported and trade receivables at 31 March 2018 would also have been £350,000 higher. Revenue for the year to 31 March 2019 would have been £600,000 higher than previously reported and trade receivables at 31 March 2019 would have been £950,000 higher. There would have been no effect in any earlier year.

An extract from the company's draft statement of comprehensive income for the year to 31 March 2020 (with comparatives for 2019 as originally stated) is as follows:

The draft financial statements for the year to 31 March 2020 show only the revenue for that year (measured in accordance with the new accounting policy) and have not been adjusted to include the additional revenue of £950,000 from previous years which now needs to be accounted for. The company's taxation expense is always equal to 20% of its profit before taxation. No dividends were paid during the two years to 31 March 2020 and retained earnings at 31 March 2019 were originally reported to be £1,605,000.

Required:

(a) Explain the circumstances in which a company which complies with international standards may change an accounting policy. Also explain how such a change is accounted for in accordance with the requirements of IAS8.

(b) Revise the extract from the statement of comprehensive income for the year to 31 March 2020 (with comparatives for 2019).

(c) Prepare an extract from the company's statement of changes in equity for the year to 31 March 2020, showing changes to retained earnings.

(d) Explain why the revised statement of comprehensive income is an improvement on the draft statement.

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Revenue Operating expenses Profit before taxation Taxation Profit after taxation 2020 £000 5,200 4,100 1,100 220 880 2019 £000 4,800 3,900 900 180 720