these assets at acquisition or in connection with impairment testing, or incorrectly estimates the useful lives of finite-life intangible assets, the impact to the Company’ consolidated financial statements could be material. The Company’s policy is to record mortgages and notes receivable at the stated principal amount net of any discount or premiums. As of December 31, 2003, the carrying amount of Notes and Mortgage Loans receivable was $285,965,000. The Company accretes or amortizes any discounts or premiums over the life of the related loan receivable utilizing the effective interest method. The Company evaluates the collectibility of both inter est and principal of each of its loans, if circumstances warrant, to determine whether it is impaired. A loan is considered to be impaired, when based on current information and events, it is probable that the Company will be unable to collect all amounts due according to the existing contractual terms. When a loan is considered to be impaired, the amount of the loss accrual is calculated by comparing the recorded investment to the value determined by discounting the expected futur cash flows at the loan’s effective interest rate or, as a practical expedient, to the value of the collateral if the loan is collateral dependent. Interest on impaired loans is recognized on a cash basis. As of December 31, 2003, the carrying amount of investments and advances to partially-owned entities, including Alexander’s, was $900,600,000. The Company considers APB 18—The Equity Method of Accounting for Investments in Common Stock, SOP 78-9—Accounting for Investments in Real Estate Ventures, EITF 96-16—Investors Accounting for an Investee When the Investor has the Majority of the Voting Interest but the Minority Partners have Certain Approval or Veto Rights, to determine the method of accounting for each of its partially-owned entities. In determining whether the Company has a controlling interest in a partially-owned entity and the requirement to consolidate the accounts of that entity, it considers factors such as ownership interest, board representation, management representation, authority to make decisions, and contractual and substantive participating rights of the partners/members. The Company has concluded that it does not control a partially- owned entity, despite an ownership interest of 50% or greater if the approval of all of the partners/members is contractually required with respect to major decisions, such as operating and capital budgets, the sale, exchange or other disposition of real property, the hiring of a chief executive officer the commencement, compromise or settlement of any lawsuit, legal proceeding or arbitration or the placement of new or additional financing secured by assets of the venture. This is the case with respect to the Company’s 60% interest in Temperature Controlled Logistics, 80% interest in Starwood Ceruzzi Venture, and 50% interests in Monmouth Mall, MartParc Wells, MartPar Orleans, and 825 Seventh Avenue.  If the Company is able to unilaterally make decisions for a partially-owned entity, the Company has concluded that it controls the entity and therefore consolidates the entity The Company accounts for investments on the equity method when its ownership interest is greater than 20% and less than 50%, and the Company does not have direct or indirect control. When partially-owned entities are in partnership form, the 20% threshold may be reduced. Equity method investments are initially recorded at cost and subsequently adjusted for the Company’s shar e of net income or loss and cash contributions and distributions to and from these entities. All other investments ar accounted for on the cost method.  On a periodic basis the Company evaluates whether there ar any indicators that the value of the Company’s investments in partially-owned entities are impaired. The ultimate realization of the Company’s investment in partially-owned entities is dependent on a number of factors including the performance of the investee and market conditions. If the Company determines that a decline in the value of the investee is other than temporary, an impairment charge would be recorded. The Company periodically evaluates the collectibility of amounts due fr om tenants and maintains an allowance for doubtful accounts ($15,246,000 as at December 31, 2003) for estimated losses r esulting from the inability of tenants to make required payments under the lease agreement. The Company also maintains an allowance for receivables arising from the straight- ALLOWANCE FOR DOUBTFUL ACCOUNTS PARTIALLY-OWNED ENTITIES NOTES AND MORTGAGE LOANS RECEIVABLE VORNADO REALTY TRUST MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 8