Simon 2021 Annual Report

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)

Our weighted average ownership interest in the Operating Partnership was as follows:

For the Year Ended December 31,

2021 2020

2019

Weighted average ownership interest . . . . . . . . . . . . . . . . . . . . 87.4 % 86.9 % 86.8 % As of December 31, 2021 and 2020, our ownership interest in the Operating Partnership was 87.4%. 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:

2021

2020

$ 3,639,353 $ 3,700,023

Land. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Buildings and improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total land, buildings and improvements . . . . . . . . . . . . . . . . . . . . . Furniture, fixtures and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . Investment properties at cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Less — accumulated depreciation . . . . . . . . . . . . . . . . . . . . . . . . . Investment properties at cost, net . . . . . . . . . . . . . . . . . . . . . . . . . . Construction in progress included above . . . . . . . . . . . . . . . . . . . .

33,857,863 37,497,216

33,908,615 37,608,638

435,150

441,558

37,932,366 15,621,127

38,050,196 14,891,937

$ 22,311,239 $ 23,158,259

$ 797,519 $

773,061

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, 2021 2020 2019 Capitalized interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 31,204 $ 22,917 $ 33,342 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

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