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

On August 4, 2011 and September 9, 2011, Brookfield, through its subsidiaries, initiated a series oftransactions to reorganize the ownership of the Units held indirectly by Brookfield. After this reorganizationand Blackstone fully exercising its Call Option, the Company is approximately 60% directly owned byBPOP Holdco LLC (“Holdco”) and approximately 40% directly owned by BPOP Investor Subsidiary, Inc.(“SubFREIT”). Holdco, a Delaware limited liability company, and SubFREIT, a Maryland corporation, areaffiliates of Brookfield.At December 31, 2011, the Company, through its subsidiaries, had ownership interests in a portfolio of23 consolidated office properties concentrated in the metropolitan areas of four major U.S. cities whichinclude New York, NY, Washington, D.C., Los Angeles, CA, and Houston, TX.At December 31, 2011, the Company also had ownership interests in five unconsolidated real estate ventureproperties comprising approximately 3.3 million square feet (unaudited) of total area.2. SIGNIFICANT ACCOUNTING POLICIESBasis of Presentation — The accompanying consolidated financial statements include the accounts andoperating results of the Company and its subsidiaries. All intercompany transactions have been eliminated.The Company consolidates entities in which it has a direct or indirect controlling voting interest. The equitymethod of accounting is followed for ownership interests in entities which the Company does not have adirect or indirect controlling voting interest, but over which it can exercise significant influence with respectto operations and major decisions. The cost method of accounting is followed for ownership interests inentities when the Company’s ownership percentage is minimal and the Company does not have significantinfluence.Accounting Estimates — The preparation of financial statements in accordance with generally acceptedaccounting principles (“GAAP”) requires management to make estimates and assumptions. These estimatesand assumptions affect the reported amounts of assets and liabilities and the disclosure of contingent assetsand liabilities at the date of the financial statements and the reported amounts of revenues and expensesduring the reporting year. Significant estimates and assumptions have been made with respect to useful livesof assets, determination of future cash flows and probabilities in assessing net recoverable amounts and netrealizable value of assets, capitalization of development costs, provision for income taxes, recoverableamounts of receivables and deferred taxes, and initial valuations and related depreciation or amortizationperiods of real estate assets, deferred costs and intangibles, particularly with respect to acquisitions. Actualresults could differ from these and other estimates.Real Estate — Rental properties are recorded at cost, less accumulated depreciation. Depreciation of rentalproperties is calculated using the straight-line method over periods not exceeding a 60-year estimated lifewith an estimated salvage value of 5%, subject to the terms of any respective ground leases. Depreciation isdetermined with reference to each rental property’s carried value, remaining estimated useful life andresidual value. Tenant improvements are deferred and amortized on a straight-line basis over the shorter ofthe economic life of the improvement or the term of the respective lease.Maintenance and repair costs are expensed against operations as incurred. Planned major maintenanceactivities (for example: roof replacement and the replacement of heating, ventilation, air conditioning andother building systems), significant building improvements, replacements and major renovations, all ofwhich improve or extend the useful life of the properties, are capitalized to rental properties and amortizedover their estimated useful lives.Furniture, equipment and certain improvements are depreciated on a straight-line basis over periods of up to10 years.Above and below market leases are amortized and recorded as either an increase (in the case of belowmarket leases) or a decrease (in the case of above market leases) to rental income over the remaining term ofF-79