Simon Property Group, Inc. Simon Property Group, L.P. Notes to Consolidated Financial Statements (Dollars in thousands, except share, per share, unit and per unit amounts and where indicated as in millions or billions)
As of December 31, 2023 and 2022, our ownership interest in the Operating Partnership was 87.0% and 87.4%, respectively. We adjust the noncontrolling limited partners’ interest at the end of each period to reflect their interest in the net assets of the Operating Partnership. Preferred unit requirements in the Operating Partnership’s accompanying consolidated statements of operations and comprehensive income represent distributions on outstanding preferred units and are recorded when declared. 3. Summary of Significant Accounting Policies Investment Properties Investment properties consist of the following as of December 31: 2023 2022 Land ................................................... $ 3,643,432 $ 3,632,943 Buildings and improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35,141,486 34,246,835 Total land, buildings and improvements . . . . . . . . . . . . . . . . . . . . . . . 38,784,918 37,879,778 Furniture, fixtures and equipment ............................ 500,220 447,134 Investment properties at cost ............................... 39,285,138 38,326,912 Less — accumulated depreciation ........................... 17,716,788 16,563,749 Investmentpropertiesatcost,net............................ $ 21,568,350 $ 21,763,163 Construction in progress included above ...................... $ 760,175 $ 587,644 We record investment properties at cost. Investment properties include costs of acquisitions; development, predevelopment, and construction (including allocable salaries and related benefits); tenant allowances and improvements; and interest and real estate taxes incurred during construction. We capitalize improvements and replacements from repair and maintenance when the repair and maintenance extends the useful life, increases capacity, or improves the efficiency of the asset. All other repair and maintenance items are expensed as incurred. We capitalize interest on projects during periods of construction until the projects are ready for their intended purpose based on interest rates in place during the construction period. The amount of interest capitalized during each year is as follows: For the Year Ended December 31, 2023 2022 2021 Capitalizedinterest................................... $ 39,906 $ 35,482 $ 31,204 We record depreciation on buildings and improvements utilizing the straight-line method over an estimated original useful life, which is generally 10 to 35 years. We review depreciable lives of investment properties periodically and we make adjustments when necessary to reflect a shorter economic life. We amortize tenant allowances and tenant improvements utilizing the straight-line method over the term of the related lease or occupancy term of the tenant, if shorter. We record depreciation on equipment and fixtures utilizing the straight-line method over seven to ten years. We review investment properties for impairment on a property-by-property basis to identify and evaluate events or changes in circumstances which indicate that the carrying value of investment properties may not be recoverable. These circumstances include, but are not limited to, declines in a property’s operational performance, such as declining cash flows, occupancy or total sales per square foot, the Company’s intent and ability to hold the related asset, and, if applicable, the remaining time to maturity of underlying financing arrangements. We measure any impairment of investment property when the estimated undiscounted operating income before depreciation and amortization during the anticipated holding period plus its residual value, and, if applicable, on a probability weighted basis, is less than the carrying value of the
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