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

NOTE 20: FAIR VALUE GAINS (LOSSES)The components of fair value adjustment are as follows:(US$ Millions) 2011 2010 2009Investment properties $ 993 $ 548 $ (996)Financial instruments 165 17 (53)Other (46) 9 162$ 1,112 $ 574 $ (887)For the year ended December 31, 2009 other includes a $133 million bargain purchase gain, net of transactioncosts of $5 million, in connection with the reorganization of the investors’ interests in the U.S. Office Fund,principally representing the excess of the fair value of the interest in the venture that the Business received underthe reorganization over the deemed cost, which was the carrying amount of the company’s pre-existinginvestment in a subsidiary venture.Included within investment properties are certain items recognized in connection with the exercise of the U.S.Office Fund Option as follows:(US$ Millions)Excess of net assets of TRZ Holdings recognized on assumption of control over the carrying amount of the equity accountedinvestment in the U.S. Office Fund (refer to Note 6) $ 212Carrying amount of U.S. Office Fund Option derecognized (241)Deferred gain realized (refer to Note 14) 172Excess of consideration paid to settle the U.S. Office Fund true-up consideration payable over carrying amount (3)Related tax effects 10Total $ 150NOTE 21: GUARANTEES, CONTINGENCIES AND OTHERIn the normal course of operations, the Business and its consolidated entities execute agreements that provide forindemnification and guarantees to third parties in transactions such as business dispositions, businessacquisitions, sales of assets and sales of services.The company’s operating subsidiaries have also agreed to indemnify its directors and certain of its officers andemployees. The nature of substantially all of the indemnification undertakings prevent the Business from makinga reasonable estimate of the maximum potential amount that it could be required to pay third parties as theagreements do not specify a maximum amount and the amounts are dependent upon the outcome of futurecontingent events, the nature and likelihood of which cannot be determined at this time. Historically, neither theBusiness nor its consolidated subsidiaries have made significant payments under such indemnificationagreements.The Business does not conduct its operations, other than those of equity-accounted investments, through entitiesthat are not fully or proportionately consolidated in these financial statements, and has not guaranteed orotherwise contractually committed to support any material financial obligations not reflected in these financialstatements.The Business and its operating subsidiaries are contingently liable with respect to litigation and claims that arisefrom time to time in the normal course of business or otherwise. A specific litigation is being pursued against oneof the company’s subsidiaries related to security on a defaulted loan. At this time, the amount of contingent cashoutflow related to the litigation and claims currently being pursued against the subsidiary is uncertain and couldbe up to C$42 million in the event the Business is completely unsuccessful in defending the claims.The Business maintains insurance on its properties in amounts and with deductibles that it believes are in linewith what owners of similar properties carry. The Business maintains all risk property insurance and rental valuecoverage (including coverage for the perils of flood, earthquake and named windstorm).F-31