Mail Stop 7010
September 15, 2005
via U.S. mail and facsimile
Alan V. Dean
Senior Vice-President, Corporate Affairs and Secretary
Brascan Corporation
BCE Place
181 Bay Street, Suite 300
Toronto, Ontario, Canada M5J 2T3
Re: Brascan Corporation
Form 40-F for the Fiscal Year Ended December 31, 2004
Filed March 31, 2005
File No. 33-97038
Dear Mr. Dean:
We have reviewed your filing and have the following
comments.
We have limited our review to only your financial statements and
related disclosures and do not intend to expand our review to
other
portions of your documents. Where indicated, we think you should
revise your document in future filings in response to these
comments.
If you disagree, we will consider your explanation as to why our
comment is inapplicable or a revision is unnecessary. Please be
as
detailed as necessary in your explanation. In some of our
comments,
we may ask you to provide us with information so we may better
understand your disclosure. After reviewing this information, we
may
raise additional comments.
Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects. We welcome
any questions you may have about our comments or on any other
aspect
of our review. Feel free to call us at the telephone numbers
listed
at the end of this letter.
Management`s Discussion and Analysis of Financial Results, page 8
of
2004 Annual Report
Structured Products and Capital Market Investments, page 33 of
2004
Annual Report
1. We note in 2003 that you created Titanium Trust, an asset
backed
trust that finances receivables and other assets acquired from you
and other entities. Please tell us more about these transactions,
including how you are accounting for these transactions in your
consolidated financial statements. Specifically, tell us how you
are
reflecting the assets securitized and the cash received on your
consolidated balance sheet and consolidated statement of cash
flows
along with the authoritative literature that supports your
accounting. Please also tell us whether these transactions are
being
accounted as sales or financing arrangements. Please refer to
SFAS
140. Finally, please tell us why you believe no disclosure was
required regarding your policy for accounting for these
transactions.
If you determine that a stated policy is needed in your periodic
filing, please provide us with the disclosure you intend to
include
in future filings.
Contractual Obligations, page 50 of 2004 Annual Report
2. In future filings, please revise your table of contractual
obligations as follows:
* To increase transparency of cash flow, please include scheduled
interest payments in your table. To the extent that the interest
rates are variable and unknown, you may use your judgment to
determine whether or not to include estimates of future variable
rate
interest payments in the table or in a footnote to the table.
Regardless of whether you decide to include variable rate
estimated
interest payments in the table or in a footnote, you should
provide
appropriate disclosure with respect to your assumptions.
* To the extent that you are in the position of paying cash rather
than receiving cash under your interest rate swaps, please
disclose
estimates of the amounts you will be obligated to pay.
Please refer to General Instruction B.(12) of Form 40-F for
additional guidance. Finally, please confirm to us that you do
not
have any leasing obligations; otherwise, please revise your
contractual obligations table accordingly. Please provide us with
the disclosure you intend to include in future filings.
1. Summary of Accounting Policies, page 57 of 2004 Annual Report
(f) Revenue and Expense Recognition, page 58 of 2004 Annual
Report
(ii) Residential property operations, page 59 of 2004 Annual
Report
3. We note that you have included your revenue recognition policy
for
the sale of land. Please clarify for us and revise your
disclosure
in future filings the nature of "all other significant
conditions."
4. Please tell us with a view toward future disclosure your policy
for recognizing revenue from the sale of homes.
9. Corporate Borrowings, page 68 of 2004 Annual Report
5. We note your disclosures provided regarding your corporate
borrowings debt instruments, which does not appear to provide
disclosure of all instruments totaling US$1.675 billion. Please
reconcile your disclosures to your total balance of US$1.675
billion.
Please tell us how you intend to revise your disclosures in future
filings so that your disclosure fully describes the total balance
included on the consolidated balance sheet.
12. Preferred Equity - Corporate and Subsidiaries, page 70 of
2004
Annual Report
Subsidiaries Preferred Equity, page 71 of 2004 Annual Report
6. We note that you are recording preferred equity shares issued
by
your subsidiary within stockholders` equity under both Canadian
and
US GAAP. Please provide us with additional detail of the terms of
these instruments including how you determined your accounting in
your consolidated financial statements is in accordance with US
GAAP.
Please provide us with the US GAAP authoritative literature that
supports your accounting. Finally, please provide us with any
revised disclosure you intend to include in future filings to
clarify
for investors your accounting of these instruments.
23. Difference from United States Generally Accepted Accounting
Principles, page 80 of 2004 Annual Report
(a) Income Statement Differences
7. In future filings, please revise to present preferred stock
dividends and net income/(losses) available to common shareholders
in
this footnote, along with the corresponding per share amounts.
Refer
to SAB Topic 6.B. Please provide us with the disclosure you
intend
to include in future filings.
8. We note that you have shares of both Class A common shares and
Class B common shares outstanding. Please address for us how your
earnings per share presentation complies with the guidance set
forth
in paragraphs 60-61 of SFAS 128. If you determine that you are
required to revise your presentation of US GAAP earnings per
share,
please provide us with your detailed calculation.
9. Please provide us with your detailed basic and diluted earnings
per share calculation for each period presented in accordance with
US
GAAP. In addition, please ensure that you address the following:
* The impact of your Series 10-12 Class A Preferred Shares that
are
convertible into Class A common shares on diluted earnings per
share.
Refer to paragraphs 26-28 of SFAS 128.
* The impact of your Series 1 Class A Preferred Shares that were
converted into Class A common shares. Refer to EITF Topic D-42.
* Please tell us whether you retroactively restated your earnings
per
share in prior periods for Class A common shares issued pursuant
to
your dividend reinvestment plan. Refer to paragraph 54 of SFAS
128
for guidance.
* Any revised disclosure you intend to include in future filings
regarding your basic and diluted earnings per share amounts.
10. In future filings, please include disclosure of the line items
that would impact operating income/(loss) under US GAAP instead of
Canadian GAAP. For example, you include "other operating costs"
and
"depreciation and amortization" below net operating income for
your
consolidated statement of income prepared in accordance with
Canadian
GAAP. However, the classification of these items on the
consolidated
statement of income for US GAAP purposes would have been within
net
operating income. Please provide us with the disclosure you
intend
to include in future filings.
(v) Market value adjustments, page 81 of 2004 Annual Report
11. We note your disclosure regarding your adjustment to net
income
under Canadian GAAP to US GAAP regarding your investments. Please
provide us with a reconciliation of your disclosures on pages 81-
82
of the 2004 Annual Report to your $1 million increase in net
income
to arrive at net income under US GAAP. Please also provide us
with
any revisions to your disclosure you intend to include in future
filings.
(c) Balance Sheet Differences, page 83 of 2004 Annual Report
12. For each series of your Class A preferred equity securities,
please tell us how you are reflecting the instrument on your US
GAAP
balance sheet and include the US GAAP authoritative literature
that
supports your accounting. Please provide us with the
disclosure you intend to include in future filings to provide
investors with a better understand of how you are accounting for
these instruments.
13. Please provide us with a detailed rollforward of stockholders`
equity for each period presented in accordance with US GAAP.
(d) Cash Flow Statement Differences, page 85 of 2004 Annual
Report
14. We note that your consolidated statement of cash flows
prepared
in accordance with Canadian GAAP include the sales and purchases
of
securities and loans advanced and collected related to your Funds
Management business as an investing activity with no
reclassification
under US GAAP. Considering your Funds Management business
activities, please tell us how you determined that classification
as
an investing activity is in accordance with SFAS 95 versus a
classification as an operating activity.
* * * *
As appropriate, please respond to these comments within 10
business days or tell us when you will provide us with a response.
Please furnish a letter that keys your responses to our comments
and
provides any requested information. Detailed response letters
greatly facilitate our review. Please file your response letter
on
EDGAR. Please understand that we may have additional comments
after
reviewing your responses to our comments.
We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filing reviewed by the staff to
be
certain that they have provided all information investors require
for
an informed decision. Since the company and its management are in
possession of all facts relating to a company`s disclosure, they
are
responsible for the accuracy and adequacy of the disclosures they
have made.
In connection with responding to our comments, please
provide,
in writing, a statement from the company acknowledging that:
? the company is responsible for the adequacy and accuracy
of
the disclosure in the filing;
? staff comments or changes to disclosure in response to
staff
comments do not foreclose the Commission from taking any action
with
respect to the filing; and
? the company may not assert staff comments as a defense in
any proceeding initiated by the Commission or any person under the
federal securities laws of the United States.
In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division of Corporation Finance in our review of your filing or in
response to our comments on your filing.
You may contact Tracey Houser, Staff Accountant, at (202)
551-
3736, or me at (202) 551-3769, if you have questions regarding
comments on the financial statements and related matters.
Sincerely,
Rufus Decker
Accounting Branch Chief
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Alan V. Dean
Brascan Corporation
September 15, 2005
Page 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-7010
DIVISION OF
CORPORATION FINANCE