4 Land and Shopping Centres Under Development 3 Shopping Centres 2 Change in  Accounting Policy The Company has a stock-based compensation plan as described in note 12(d). Effective January 1, 2003, the Company has adopted the new recommendations of the Canadian Institute of Chartered Accountants with respect to stock-based compensation. The new standard requires stock-based payments and direct awards made to non-employees and direct awards, stock appreciation rights and similar awards to employees that are settled in cash or equity instruments to be determined using a fair value based method. In accordance with the new standard, the Company recognizes compensation expense for stock- based compensation awards at the fair value as at the granting date over the vesting period. This change has been made on a prospective basis, and as such applies only to grants made on or after January 1, 2003. During the year ended December 31, 2003, the Company granted 250,500 options which had an approximate fair value of $0.3 million at the time of issue. In accordance with the new standard, $0.1 million has been recorded as an expense in the consolidated statements of operations. Effective January 1, 2003, the Company has adopted the new recommendations of the Canadian Institute of Chartered Accountants with respect to impairment of long-lived assets. The adoption of this standard had no impact on the consolidated financial statements. In 2003, the Company acquired interests in 18 properties totalling 1.7 million square feet for $249.2 million. The properties were financed with $107.1 million in cash, $10.0 million in assumed mortgages, $129.6 million in new mortgages, and $2.5 million in shares of the Company. In 2002, in addition to the eight properties acquired as part of the FCI transaction described in note 19, the Company acquired ten properties totalling 1.2 million square feet for a total of $105.5 million. These properties were financed with $53.9 million in cash, $15.0 million with a short-term vendor take back mortgage which was repaid before year end, $35.7 million in new mortgages, and $0.9 million in shares of the Company. The Company’s interests in two leasehold properties (2002 – one), have a net book value of $21.8 million (2002 – $16.5 million) net of accumulated amortization of $1.8 million (2002 – $1.6 million). Interest and general and administrative expenses capitalized to development properties during the year ended December 31, 2003 totalled $3.5 million, (2002 – $1.8 million) and $0.3 million (2002 – $0.3 million), respectively. The costs to complete projects currently under development are estimated at $40 million of which $28 million has been committed. 55 First Capital Realty Annual Report 2003 (thousands of dollars) 2003 2002 Land $ 237,057 $ 154,856 Buildings and improvements 984,927 738,512 Deferred leasing costs 21,634 15,418 1,243,618 908,786 Accumulated amortization (42,288) (33,169) $ 1,201,330 $ 875,617