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

(ii)Performance and management fee revenueCertain of the company’s operating subsidiaries are entitled to management fees and performance feeson the management of properties for third parties. The Business recognizes management fees as earned.The Business recognizes performance fees in revenue when the amount receivable from its fundpartners is determinable at the end of a contractually specified term.j) Derivative financial instruments and hedge accountingDerivative instruments are recorded in the carve-out balance sheets at fair value, including those derivatives thatare embedded in financial or non-financial contracts and which are not closely related to the host contract.The following summarizes the company’s classification and measurement of financial assets and liabilities:ClassificationMeasurementFinancial assetsNon-current financial assetsEquity securities designated as available-for-sale (“AFS”) AFS Fair valueU.S. Office Fund option FVTPL (1) Fair valueBrookfield Residential promissory notes Loans and receivables Amortized costLoans receivable designated as FVTPL FVTPL Fair valueOther loans receivable Loans and receivables Amortized costReceivables and other assetsAccounts receivable Loans and receivables Amortized costLoan receivable from affiliate Loans and receivables Amortized costRestricted cash and deposits Loans and receivables Amortized costCash and cash equivalents Loans and receivables Amortized costFinancial liabilitiesCommercial property debt Other liabilities Amortized cost (2)Capital securities – corporate Other liabilities Amortized costOther non-current financial liabilitiesLoan payable Other liabilities Amortized costU.S. Office Fund true-up obligation Other liabilities Amortized cost (2)Accounts payable and accrued liabilities Other liabilities Amortized cost(1) Fair value through profit and loss (“FVTPL”)(2) Except for derivatives embedded in the related financial instruments that are classified as FVTPLThe company’s subsidiaries selectively utilize derivative financial instruments primarily to manage financialrisks, including interest rate and foreign exchange risks. Derivative financial instruments are recorded at fairvalue determined on a credit adjusted basis.The Business applies hedge accounting to derivative financial instruments in cashflow hedging relationships, andto derivative and non-derivative financial instruments designated as hedges of net investments in subsidiaries.Hedge accounting is discontinued prospectively when the hedge relationship is terminated or no longer qualifiesas a hedge, or when the hedging item is sold or terminated.In cashflow hedging relationships, the effective portion of the change in the fair value of the hedging derivativeis recognized in OCI while the ineffective portion is recognized in net income. Hedging gains and lossesrecognized in accumulated other comprehensive income (“AOCI”) are reclassified to net income in the periodswhen the hedged item affects net income. Gains and losses on derivatives are immediately reclassified toinvestment and other income when the hedged item is sold or terminated or when it is determined that a hedgedforecasted transaction is no longer probable.F-13