NOTES TO CONSOLIDATED  FINANCIAL STATEMENTS Construction in Progress Deferred Debt Costs Revenue Recognition Deferred Income Construction in progress includes the land acquisition costs, predevelopment costs, and development costs of active projects. Predevelopment costs associated with these active projects include closing costs, legal, zoning and permitting costs and other project carrying costs incurred prior to the commencement of construction. Development costs include direct construction costs and indirect costs incurred subsequent to the start of construction such as architectural, engineering, construction management and carrying costs consisting of interest, real estate taxes and insurance. Construction in progress balances as of  December 31, 2002 and 2001 are as follows: In addition to rents due currently, accounts receivable include $6,262,000 and $4,675,000,  at December 31, 2002 and 2001, respectively, representing minimum rental income accrued on  a straight-line basis to be paid by tenants over the remaining term of their respective leases. These amounts are presented after netting allowances  of $693,000 and $676,000, respectively, for tenants whose rent payment history or financial condition casts doubt upon the tenant’s ability to perform under its lease obligations. Deferred debt costs consist of fees and costs incurred to obtain long-term financing, construction financing and the revolving line of credit. These fees and costs are being amortized over the terms of  the respective loans or agreements. Deferred debt costs totaled $4,125,000 and $3,563,000, and are presented net of accumulated amortization of $2,693,000 and $1,968,000, at December 31, 2002 and 2001, respectively. Deferred income consists of payments received from tenants prior to the time they are earned and recognized by the Company as revenue. These payments include prepayment of the following month’s rent, prepayment of real estate taxes when the taxing jurisdiction has a fiscal year differing from the calendar year reimbursements specified in the lease agreement and advance payments by tenants for tenant construction work provided by  the Company. Accounts receivable primarily represent amounts currently due from tenants in accordance with  the terms of the respective leases. Receivables  are reviewed monthly and reserves are established  with a charge to current period operations when,  in the opinion of management, collection of the receivable is doubtful. Accounts receivable in  the accompanying consolidated financial statements are shown net of an allowance for doubtful accounts of $681,000 and $559,000,  at December 31, 2002 and 2001, respectively. Accounts Receivable and Accrued Income Rental and interest income is accrued as earned except when doubt exists as to collectibility, in which case the accrual is discontinued. When rental payments due under leases vary from a straight-line basis because of free rent periods or stepped increases, income is recognized on a straight-line basis in accordance with accounting principles generally accepted in the United States. Expense recoveries represent a portion of property operating expenses billed to the tenants, including common area maintenance, real estate taxes and other recoverable costs. Expense recoveries are recognized in the period when the expenses are incurred. Rental income based on a tenant's revenues (“percentage rent”) is accrued when a tenant reports sales that exceed a specified breakpoint. 20 December 31, 2002 2001 Broadlands Village $ 6,192 $ -- Ashburn Village IV -- 1,163 Other 2,100 1,361 Balance $ 8,292 $ 2,524 For the Years Ended December 31, 2002 2001 Beginning Balance $ 559 $ 563 Provision for Credit Losses 421 617 Charge-offs (299) (621) Ending Balance  $ 681 $ 559 Construction in Progress (In thousands) Allowance for Doubtful Accounts (In thousands)