H Ltd began trading on 1 January 2014, preparing financial statements to 31 December each year. During 2017, the company decided to change its accounting policy with regard to one of its operating expenses. Total operating expenses calculated using the previous accounting policy and shown in the company's financial statements for the first three years of trading were as follows:

	£000
year to 31 December 2014	240
year to 31 December 2015	260
year to 31 December 2016	290
	–––– 790 ––––

If the new accounting policy had been applied in previous years, the total operating expenses would have been:

	£000
year to 31 December 2014	390
year to 31 December 2015	310
year to 31 December	230
	–––– 930 ––––

Furthermore, the company's liabilities at 31 December 2016 would have been higher by £140,000 (£930,000 – £790,000).
A summary of the company's statement of comprehensive income for the year to 31 December 2017 (before adjusting comparative figures to reflect the change in accounting policy) shows the following:

	2017	2016
	£000	£000
Profit before operating expenses	1,510	1,450
Operating expenses	190	290
Profit before taxation	––––– 1,320	––––– 1,160
Taxation	264 –––––	232 –––––
Profit after taxation	1,056 –––––	928 –––––

Retained earnings were originally reported to be £2,371,000 on 31 December 2016. No dividends have been paid in any year. It may be assumed that the company's tax expense is always equal to 20% of the profit before taxation.

Required:
(a) Rewrite the extract from the statement of comprehensive income so as to reflect the change in accounting policy, in accordance with the requirements of IAS8.
(b) Prepare an extract from the company's statement of changes in equity for the year to 31 December 2017, showing changes to retained earnings.