2. Basis of preparation (continued):

(f) Rate regulation (continued):

(iii) Distribution rates:

On September 18, 2008, EWU submitted a COS rate application to the OEB to change distribution rates effective May 1, 2009. The application was approved by the OEB on May 1, 2009.

On September 21, 2018, EWU submitted an IRM application to the OEB to change distribution rates effective May 1, 2019. The IRM application, which provided a mechanistic and formulaic adjustment to distribution rates and charges, was approved by the OEB on March 28, 2019. The GDP IPI-FDD for 2019 is 1.5%, EWU's stretch factor is 0.6% and the productivity factor determined by the OEB is 0%, resulting in a net adjustment of 0.9% to the previous year's rates.

3. Significant accounting policies:

The accounting policies set out below have been applied consistently to all years presented in these consolidated financial statements.

(a) Cash and cash equivalents:

Cash and cash equivalents consist of balances with banks and investments with a maturity of approximately three months or less at the date of purchase, unless they are held for investment rather than liquidity purposes, in which case they are classified as an investment.

(b) Financial instruments:

All consolidated financial assets and liabilities of the Corporation are classified into one of the following categories: amortized cost, fair value through other comprehensive income, or fair value through profit or loss.

The Corporation has classified its financial instruments as follows