Caribbean Utilities Company, Ltd.  2011  Annual Report Notes to Financial Statements 38 (Expressed in thousands of United States dollars) 3.  Future Accounting Changes  Effective January 1, 2012, the Company was required to adopt a new set of accounting standards. Publicly accountable enterprises in Canada were required to adopt International Financial Reporting Standards (“IFRS”) effective January 1, 2011; however, qualifying entities with rate regulated activities were granted an optional one-year deferral for the adoption  of IFRS, due to continued uncertainty around the adoption of a rate-regulated accounting standard by the International Accounting Standards Board (“IASB”). As a qualifying entity with rate-regulated activities, CUC has elected to opt for the one-year deferral and, therefore, continues to prepare its financial statements in accordance with Part V of the Canadian Institute of Chartered Accountants Handbook for all interim and annual periods ending on or before December 31, 2011. Due to continued uncertainty around the adoption of a rate-regulated accounting standard by the IASB, CUC has evaluated the option of adopting United States generally accepted accounting principles (“US GAAP”), as opposed to IFRS, and has decided to adopt US GAAP effective January 1, 2012. Canadian securities rules allow a reporting issuer to prepare and file its financial statements in accordance with US GAAP by qualifying as a US Securities and Exchange Commission (“SEC”) Issuer. An SEC Issuer is defined under the Canadian rules as an issuer that: (i) has a class of securities registered with the SEC under Section 12 of the US Securities Exchange Act of 1934, as amended (the “Exchange Act”); or (ii) is required to file reports under Section 15(d) of the Exchange Act. The Company is not currently an SEC Issuer. On June 6, 2011 Fortis Inc. filed an application with the Ontario Securities Commission (the “OSC”) seeking relief, pursuant to National Policy 11-203 - Process for Exemptive Relief Applications in Multiple Jurisdictions, to permit Fortis Inc. and its reporting issuer subsidiaries (of which CUC is one) to prepare their financial statements in accordance with US GAAP without qualifying as an SEC Issuer (“the Exemption”). On June 9, 2011 the OSC issued its decision and granted the Exemption for financial years commencing on or after January 1, 2012 but before January 1, 2015, and interim periods therein. The Exemption will terminate in respect of financial statements for annual and interim periods commencing on or after the earlier of: (a) January 1, 2015; or (b) the date on which the Company ceases to have activities subject to rate regulation.  The Company’s application of Canadian GAAP currently relies on US GAAP for guidance on accounting for rate-regulated activities. The adoption of US GAAP in 2012 is, therefore, expected to result in fewer significant changes to the Company’s accounting policies as compared to accounting policy changes that may have resulted from the adoption of IFRS. US GAAP guidance on accounting for rate-regulated activities allows the economic impact of rate-regulated activities to be recognised in the financial statements in a manner consistent with the timing by which amounts are reflected in customer rates. CUC believes that the continued application of rate regulated accounting, and the associated recognition of regulatory assets and liabilities under US GAAP, accurately reflects the impact that rate regulation has on the Company’s financial position and results of operations. The Company has received approval from the regulator for the use of US GAAP during the exemption period .