Alto Palermo S.A. (APSA)

Alto Palermo S.A. (APSA)
Notes to the Consolidated Financial Statements (continued)
(In Argentine Pesos, except as otherwise indicated)
19. Differences between Argentine GAAP and US GAAP (continued)
II. Additional disclosure requirements
d) Disclosure about fair value of financial instruments
Under Argentine GAAP, there are no specific rules regarding disclosure of fair value of financial instruments.
Under US GAAP, SFAS No. 105 requires reporting entities to disclose certain information about financial
instruments with off-balance sheet risk of accounting loss. SFAS No. 107, "Disclosures About Fair Value of Financial
Instruments", requires disclosure of fair value information about financial instruments whether or not recognized in the
balance sheet, for which it is practicable to estimate fair value. Financial instruments include such items as cash and cash
equivalents and accounts receivable and other instruments. SFAS No. 107 excludes from its disclosure requirements lease
contracts and various significant assets and liabilities that are not considered to be financial instruments. SFAS No. 119
requires reporting entities to disclose certain information for derivative financial instruments. SFAS No. 133 superseded
SFAS No. 105 and SFAS No. 119 and amended SFAS No. 107 to include in SFAS No. 107 the disclosure requirements of
credit risk concentrations from SFAS No. 105. See Note 19.II.e) for details of concentration of credit risk.
Fair value estimates are made as of a specific point in time based on the characteristics of the financial instruments
and the relevant market information. Where available, quoted market prices are used. In other cases, fair values are based on
estimates using other valuation techniques, such as discounting estimated future cash flows using a rate commensurate with
the risks involved or other acceptable methods. These techniques involve uncertainties and are significantly affected by the
assumptions used and the judgments made regarding risk characteristics of various financial instruments, prepayments,
discount rates, estimates of future cash flows, future expected loss experience, and other factors. Changes in assumptions
could significantly affect these estimates. Derived fair value estimates cannot be substantiated by comparison to independent
markets and, in many cases, could not be realized in an immediate sale of the instrument. Also, because of differences in
methodologies and assumptions used to estimate fair value, the Company's fair values should not be compared to those of
other companies.
Under this statement, fair value estimates are based on existing financial instruments without attempting to estimate
the value of anticipated future business and the value of assets and liabilities that are not considered financial instruments.
Accordingly, the aggregate fair value amount presented does not represent the underlying value of the Company. For
certain assets and liabilities, the information required under this statement is supplemental with additional information
relevant to an understanding of the fair value.
The methods and assumptions used to estimate the fair values of each class of financial instruments as of June 30,
2007 and 2006 are as follows:
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