Mail Stop 7010
January 12, 2006
via U.S. mail and facsimile
Brian Lawson
Vice President and Chief Financial Officer
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. Lawson:
As noted in our letter dated December 29, 2005, we have the
following additional comments based on our review of your response
letter dated December 1, 2005 to comment 2 in our letter dated
October 31, 2005. In our comments, we ask you to provide us with
information so we may better understand your disclosure. After
reviewing this information, we may raise additional comments.
General
1. You state that the value of Brascan`s assets has been
determined
consistent with Section 2(a)(41)(A) of the Investment Company Act
of
1940, except that the valuation was performed by Brascan`s
management
"rather than its board of directors." Section 2(a)(41) of the
Investment Company Act requires that securities be valued using
market quotations if such quotations are readily available. When
market quotations are not readily available, securities must be
valued using their fair values as determined in good faith by the
company`s board of directors. Please tell us if your board of
directors has established procedures for reviewing and evaluating
the
value of your assets, including securities. If your board of
directors adopted such procedures, please tell us if the
procedures
require the board of directors, in its oversight role, to review
or
approve valuations performed by your management.
2. You state that your analysis has been presented in accordance
with
Canadian GAAP, which you believe would result in a "substantially
similar analysis" to one prepared in accordance with US GAAP.
Under
the federal securities laws, the status of an entity as an
investment
company must be determined in accordance with US GAAP.
Accordingly,
please provide us with a reconciliation of your analysis to US
GAAP.
3. We note that you reported loans and notes receivable equal to
$900
million of funds management assets on your consolidated balance
sheet
as at December 31, 2004 and $407 million on your unaudited balance
sheet as at June 30, 2005. Your analysis includes your
unconsolidated balance sheet. The unconsolidated balance sheet,
however, contains no line item comparable to loans and notes
receivable and discloses no amounts under the asset category
"Loans
receivable, net of provisions" for any quarter, including those
ending December 31, 2004 and June 30, 2005. Please explain why
you
have not disclosed the value of the loans and notes receivable in
your analysis. In footnote 4 of your unconsolidated balance
sheet,
you state that "loans receivable that would otherwise qualify as
`bad` assets have been provided for in accordance with GAAP."
Please
clarify the meaning of this statement in footnote 4.
4. We previously requested that you separately analyze the
investment
company status for each of your subsidiaries. Under Section
3(a)(1)(C) of the Investment Company Act, the amount of investment
securities must be determined based on total assets on an
unconsolidated basis. We note that each of the separate
subsidiary
analyses you provided included a footnote stating that
consolidated
financial statements of the subsidiary were used as a proxy for
unconsolidated financial statements (with the exception of Island
Timberlands). We are not aware of any authority that permits
analysis on other than an unconsolidated basis. Please provide us
with an analysis for each of these subsidiaries (including Island
Timberlands, as appropriate) on an unconsolidated basis.
5. In addition, you have not provided us with any information or
analysis for BFREG/Commercial, Brazil Timberlands and Coal Lands,
each of which is shown as holding assets that were included in
calculating whether your investment securities exceed the 40%
limitation. Please either provide the requested information and
analysis or confirm, if accurate, that you have included the value
of
your securities holdings in BFREG/Commercial, Brazil Timberlands
and
Coal Lands in calculating the percentage of investment securities
held by you under Section 3(a)(1)(C).
6. As noted above, Section 2(a)(41) requires that securities be
valued using market quotations if such quotations are readily
available. When market quotations are not readily available,
securities must be valued using their fair values as determined in
good faith by the company`s board of directors. Please explain
how
the investment securities held by Brookfield Properties
Corporation,
Brookfield Homes Corporation, Brascan Power Inc. and Brazil
Investments were valued. If fair values were used, please provide
information regarding the basis for, and the persons responsible
for
determining, such fair values.
* * * *
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.
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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Brian Lawson
Brascan Corporation
January 12, 2006
Page 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-7010
DIVISION OF
CORPORATION FINANCE