Consolidated Financial Statements and Notes - Brookfield Asset ...

Market value adjustments in other comprehensive income in 2005 and 2004 are recorded on the balance sheet as follows:MILLIONS 2005 2004Market value adjustmentsAvailable for sale securities classifi ed as:Accounts receivable and other $ — $ 12Securities 12 (34)Derivative power sales contracts designated as cash fl ow hedges classifi ed as:Accounts receivable and other (106) (20)Accounts payable and other (50) —Equity accounted investments 2 (10)$ (142) $ (52)(ii) Minimum pension liability adjustmentU.S. GAAP requires the excess of any unfunded accumulated benefi t obligation (with certain other adjustments) to be refl ectedas an additional minimum pension liability in the consolidated balance sheet with an offsetting adjustment to intangible assetsto the extent of unrecognized prior service costs, with the remainder recorded in other comprehensive income. The company hasrefl ected the adjustment including its proportionate share of adjustments recorded by Falconbridge, Norbord, Fraser Papers andBrookfi eld Power.(iii) Foreign currency translation adjustmentsCanadian GAAP provides that the carrying values of assets and liabilities denominated in foreign currencies that are held by selfsustaining operations are revalued at current exchange rates. U.S. GAAP requires that the change in the cumulative translationadjustment account be recorded in other comprehensive income. The amount recorded by the company represents the changein the cumulative translation account. The resulting changes in the carrying values of assets which arise for foreign currencyconversion are not necessarily refl ective of changes in underlying value.(c) Balance Sheet DifferencesThe incorporation of the signifi cant differences in accounting principles under Canadian GAAP and U.S. GAAP would result in thefollowing presentation of the company’s balance sheet:MILLIONS Note 2005 2004AssetsCash and cash equivalents $ 951 $ 455Accounts receivable and other (i) 4,449 3,055Securities (ii) 4,344 3,278Loans and notes receivable 332 897Property, plant and equipment (iii) 15,292 11,621Equity accounted investments (iv) 552 1,680Total assets under U.S. GAAP $ 25,920 $ 20,986Liabilities and shareholders’ equityNon-recourse borrowingsProperty specifi c mortgages $ 8,756 $ 6,890Other debt of subsidiaries 2,764 2,586Corporate borrowings 1,620 1,675Accounts and other payables 4,358 2,806Convertible and subordinated notes 216 223Non-controlling interests 2,740 2,566Preferred equity 847 912Common equity (v) 4,619 3,328Total liabilities and equity under U.S. GAAP $ 25,920 $ 20,98692Brookfield Asset Management | 2005 Annual Report