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

o) Critical accounting estimates and assumptionsThe company makes estimates and assumptions that affect carried amounts of assets and liabilities, disclosure ofcontingent assets and liabilities and the reported amount of earnings for the period. Actual results could differfrom estimates. The estimates and assumptions that are critical to the determination of the amounts reported inthe financial statements relate to the following:(i)(ii)Investment propertyThe critical estimates and assumptions underlying the valuation of operating properties and propertydevelopments are set out in Note 5.Financial instrumentsAs discussed in Note 9, the Business determines the fair value of its warrants to acquire commonshares of General Growth Properties (“GGP”) using a Black-Scholes option pricing model wherein it isrequired to make estimates and assumptions regarding the expected future volatility of GGP’s sharesand the term of the warrants.The Business also has certain financial assets and liabilities with embedded participation featuresrelated to the values of investment properties whose fair values are based on the fair values of therelated properties.The Business holds other financial instruments that represent equity interests in investment propertyentities that are measured at fair value as these financial instruments are designated as FVTPL or AFS.Estimation of the fair value of these instruments is also subject to the estimates and assumptionsassociated with investment properties.The fair value of interest rate caps is determined based on generally accepted pricing models usingquoted market interest rates for the appropriate term. Interest rate swaps are valued at the present valueof estimated future cashflows and discounted based on applicable yield curves derived from marketinterest rates.Application of the effective interest method to certain financial instruments involves estimates andassumptions about the timing and amount of future principal and interest payments.p) Earnings per shareThe company’s historical capital structure is not indicative of its prospective structure since no direct ownershiprelationship existed among all the various units comprising the Business. Accordingly, historical earnings pershare has not been presented in the financial statements.NOTE 3: ADOPTION OF ACCOUNTING STANDARDOn November 4, 2009, the IASB issued a revised version of IAS 24, “Related Party Disclosures” (“IAS 24”).IAS 24 requires entities to disclose in their financial statements information about transactions with relatedparties. Generally, two parties are related to each other if one party controls, or significantly influences, the otherparty. IAS 24 has simplified the definition of a related party and removed certain of the disclosures required bythe predecessor standard. The revised standard is effective for annual periods beginning on or after January 1,2011. The related party disclosures included in these financial statements have been prepared in accordance withthe revised standard.NOTE 4: FUTURE ACCOUNTING POLICY CHANGESThe following are the accounting policies that the Business expects to adopt in the future:(a) Financial InstrumentsIFRS 9, “Financial Instruments” (“IFRS 9”) is a multi-phase project to replace IAS 39. IFRS 9introduces new requirements for classifying and measuring financial assets. In October 2010 the IASBreissued IFRS 9, incorporating new requirements on accounting for financial liabilities and carryingF-17