The correct answers are: The company has material underprovision for income tax arising from the use of incorrect data by the tax advisors acting for the company; and A deterioration in sales performance has led to the directors restating their methods for the calculation of the general irrecoverable debt provision.

IAS 8 does not permit recurrent adjustments or correction of estimates to be treated as retrospective corrections since these are a normal feature of everyday business accounting practices. In the situation described, if this was a one-off correction of a material error then it would be a retrospective correction.

The restatement of the methods for the calculation of the general irrecoverable debt provision does not appear to be a restatement of the policy for accounting for irrecoverable debts. If the directors could demonstrate the change is material and gives a fairer view of the company's affairs, then perhaps it could be argued that this option is a change in policy.

In general, errors which arose as a result of imperfectly available information will be treated as a change in accounting estimates. Errors that arise as a result of carelessness or negligence will be treated as correction of an error.