FORM 20-F/A Brookfield Property Partners L.P. - Brookfield Asset ...

Notes to the Carve-out Financial StatementsNOTE 1: NATURE AND DESCRIPTION OF THE OPERATIONSThe Commercial Property Operations of Brookfield Asset Management Inc. (“Brookfield” or the “parentcompany”) consist of substantially all of Brookfield’s commercial property operations, including office, retail,multi-family and industrial and opportunistic investments, located in the United States, Canada, Australia, Braziland Europe that have historically been owned and operated, both directly and through its operating entities, byBrookfield (collectively, the “Business” or the “company”). These operations include interests in 126 officeproperties and 184 retail properties. In addition, Brookfield has interests in a multi-family and industrial platformand an 18 million square foot commercial office development pipeline.Brookfield will effect a reorganization so that an interest in the Business is acquired by holding entities, whichwill be owned by a subsidiary of Brookfield Property Partners L.P. (the “partnership”), a newly formed limitedpartnership. Brookfield intends to transfer the Business through a special dividend to holders of its Class Alimited voting shares and Class B limited voting shares of the partnership’s non-voting limited partnership units(the “spin-off’). Immediately following the spin-off, holders of Class A limited voting shares and Class B limitedvoting shares of Brookfield will hold 99% of the units of the partnership. The partnership’s sole direct investmentwill be a limited partner interest in Brookfield Property L.P. (the “property partnership”) which will control theBusiness through holding entities. It is currently anticipated that the partnership and Brookfield will hold alimited partnership interests in the property partnership of approximately 10% and 90%, respectively. Thepartnership will control the strategic, financial and operating policy decisions of the property partnershippursuant to a voting agreement to be entered into between the partnership and Brookfield. Wholly-ownedsubsidiaries of Brookfield will serve as the general partners for both the partnership and the property partnership.The parent company’s registered head office is Brookfield Place, 181 Bay Street, Suite 300, Toronto, Ontario,M5J 2T3.NOTE 2: SIGNIFICANT ACCOUNTING POLICIESa) Basis of presentationThese carve-out financial statements (the “financial statements”) have been prepared in accordance withInternational Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board(“IASB”) using the historical books and records of Brookfield. The financial statements represent a carve-out ofthe assets, liabilities, revenues, expenses, and cashflows of the Business that will be contributed to thepartnership. The principal operating subsidiaries of the Business generally maintain their own independentmanagement and infrastructure. To the extent that certain resources are centralized by Brookfield and sharedacross entities including those of the Business, such as information technology, fees for access to and use of suchresources have been charged to the respective subsidiaries as a means of allocation of such costs across theoperations. Such fees are included in the results of operations of the Business. The financial statements do notinclude the parent company’s general partner interests in certain of the retail and other investments as theseinterests are not being transferred to the partnership.The financial statements present the equity in the net assets of the Business rather than the shareholders’ equity.Non-controlling interests in the net assets and results of the subsidiaries within the Business are shown separatelyin equity in the carve-out balance sheet. In addition, while the Business is not a taxable legal entity, current anddeferred income taxes have been provided in these carve-out financial statements as if it were.Due to the inherent limitations of carving out the assets, liabilities, operations and cashflows from larger entities,these financial statements may not necessarily reflect the company’s financial position, results of operations andcashflow for future periods, nor do they reflect the financial position, results of operations and cashflow thatwould have been realized had the Business been a stand-alone entity during the periods presented.F-9