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Brookfield Asset Management

Brookfield

Brookfield
Asset Management Inc.

Tel
(416) 363-9491

BCE
Place, 181 Bay Street, Suite 300

Fax
(416) 365-9542

Toronto,
Ontario M5J 2T3

www.brookfield.com

May 18, 2006

Mr. Rufus Decker Accounting

Branch Chief

United States Securities and Exchange Commission

100 F Street, N.E.

Washington, D.C.

20549-7010

    Re:

    Brookfield Asset Management Inc.

Form 40-F for the Fiscal Year Ended December 31, 2005

Your File No. 33-97038

Dear Mr. Decker:

I am responding to your correspondence dated May 9th of this year.

In your letter you conclude that we could be required to “net cash settle” the conversion option
associated with our Series 10, 11 and 12 Preference Shares and as a result we should restate our
U.S. GAAP balance sheets. I wish to clarify that there is no requirement to “net cash settle” and
have attached an opinion from our Canadian securities counsel (Torys) confirming this.
Accordingly, we continue to maintain that our balance sheets as included in note 24 to our 2005
Form 40-F are fairly presented in accordance with U.S. GAAP.

The prospectuses under which the subject securities were issued do not state that the “passage of
time” is the sole condition precedent {emphasis added} to exercise of the conversion option,
although we agree that it is the condition that is given the most prominence in the prospectuses.
There are other conditions, both implicit and explicit, which are described to the extent
considered necessary by us as well as the underwriters and our respective legal counsels. We
believed at the time, and continue to believe, that the disclosure in the prospectuses for the
Series 10, 11 and 12 Preference Shares contained all material information regarding the subject
securities and therefore satisfied all applicable legal and regulatory requirements. We also note
that it is consistent with that of similar securities issued by other companies. The possibility
that we would not be in a position to issue common shares upon the exercise of the conversion
option is sufficiently remote that we do not believe the additional disclosure you suggest
regarding the definition of “freely tradeable” and the implications for the holders of Series 10,
11 or 12 Preference Shares if we could not issue common shares on the conversion, would be viewed
as material to the investor. Accordingly, we do not believe that restatement of our balance sheets
is appropriate.

We acknowledge the error in the description of the dividend policy for the Series 12 preference
shares in our 2005 Form 40-F, which refers to dividends on those shares as being “noncumulative”
instead of “cumulative”. Given we have always paid the dividends on these preference shares on a
current basis, we propose correcting the disclosure in the next filing of our Form 40-F.

I believe it would be helpful to describe for you our treatment of these securities under Canadian
GAAP. Prior to January 1, 2005 we included the subject securities as equity under both Canadian
GAAP and U.S. GAAP.

You will no doubt have noted that we reclassified the subject securities from equity to liabilities
in our Canadian GAAP balance sheet on a retroactive basis commencing January 1, 2005. This was in
response to and in accordance with new accounting standards issued by the CICA. These standards
applied to both debt and equity securities. We have noted in our prior correspondence that there
continues to be a specific exclusion of “an outstanding share” from the requirement in paragraph 11
of FASB 150 and the exclusion under paragraph 12 of an “outstanding share that embodies a
conditional obligation” from the requirement to account for certain financial instruments as
obligations. Accordingly, we did not reclassify the subject securities in our U.S. GAAP
statements.

As a matter of general policy, we prefer to follow accounting policies that result in consistent
presentation under both U.S. GAAP and Canadian GAAP where this is appropriate and permitted. The
new guidelines issued by the CICA did not, however, coincide with any change in guidance or policy
with respect to U.S. GAAP and accordingly we had no basis on which to reclassify the subject
securities for these purposes. In our review of this issue at the time we were informed that the
pending U.S. pronouncements on Financial Instruments were likely to specifically address this
point, at which time we would be able to more closely harmonize our U.S. GAAP and Canadian GAAP
disclosures.

We also noted that other Canadian issuers of similar securities have followed the same disclosure
as we, and accordingly have reported reconciling items between their U.S. GAAP and Canadian GAAP
financial statements. As a result of discussions with our auditors, we believe that the Office of
the Chief Accountant in the Division of Corporation Finance should be involved in the assessment of
our response due to the detailed nature of the comment raised and what we believe to be a pervasive
issue particularly in the Canadian marketplace and the possibility that this is an issue that might
best be addressed by the SEC in some form of policy statement that would enable Canadian issuers to
adopt a consistent approach to the classification of these uniquely Canadian securities.

As the CFO of the company and signatory to the correspondence with the Commission on these issues,
I have kept our CEO and the Audit Committee abreast of our discussions and have provided copies of
the correspondence to our Board of Directors. As requested in your letter, we acknowledge:

    •

    The company is responsible for the adequacy and accuracy of the disclosure in the filing;

    •

    Staff comments or changes to disclosure in response to staff comments do not foreclose the
Commission from taking any action with respect to the filing; and

    •

    The company may not assert staff comments as a defense in any proceeding initiated by the
Commission or any person under the federal securities laws of the United States.

We are anxious to resolve this matter, and would welcome the opportunity to discuss our response
with you in person or by telephone in order to provide you with any other information or commentary
that you would find helpful in achieving this.

Yours very truly,

Brian D. Lawson

Managing Partner & Chief Financial Officer

Tory’s
letter redacted