Simon Property Group, Inc. Simon Property Group, L.P. Notes to Schedule III as of December 31, 2022 (Dollars in thousands)
(1) Reconciliation of Real Estate Properties: The changes in real estate assets for the years ended December 31, 2022, 2021, and 2020 are as follows: 2022 2021 2020 Balance, beginning of year. . . . . . . . . . . . $ 37,497,216 $ 37,608,638 $ 37,356,739 Acquisitions and consolidations (7) .. 122,074 121,250 — Improvements ................... 688,173 569,483 401,202 Disposals and deconsolidations ..... (308,030) (655,482) (320,328) Currency Translation Adjustment ... (119,655) (146,673) 171,025 Balance, close of year ............... $ 37,879,778 $ 37,497,216 $ 37,608,638 The unaudited aggregate cost of domestic consolidated real estate assets for U.S. federal income tax purposes as of December 31, 2022 was $20,977,712. Reconciliation of Accumulated Depreciation: The changes in accumulated depreciation for the years ended December 31, 2022, 2021, and 2020 are as follows: 2022 2021 2020 Balance, beginning of year ............. $ 15,304,461 $ 14,592,867 $ 13,622,433 Depreciation expense (7) . . . . . . . . . . . . 1,075,391 1,083,705 1,226,611 Disposals and deconsolidations. . . . . . . (180,091) (403,582) (236,123) Currency Translation Adjustment ..... 24,289 31,471 (20,054) Balance,closeofyear................. $ 16,224,050 $ 15,304,461 $ 14,592,867 Depreciation of our investment in buildings and improvements reflected in the consolidated statements of operations and comprehensive income is calculated over the estimated original lives of the assets as noted below. Buildings and Improvements — typically 10-35 years for the structure, 15 years for landscaping and parking lot, and 10 years for HVAC equipment. Tenant Allowances and Improvements — shorter of lease term or useful life. (2) (3) Initial cost generally represents net book value at December 20, 1993, except for acquired properties and new developments after December 20, 1993. Initial cost also includes any new developments that are opened during the current year. Costs of disposals and impairments of property are first reflected as a reduction to cost capitalized subsequent to acquisition. (4) Not developed/constructed by us or our predecessors. The date of construction represents the initial acquisition date for assets in which we have acquired multiple interests. (5) Initial cost for these properties is the cost at the date of consolidation for properties previously accounted for under the equity method of accounting. (6) Encumbrances represent face amount of mortgage debt and exclude any premiums or discounts and deferred financing costs.
(7) Represents the original cost and does not include subsequent currency translation adjustments.
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