33 Management’s Discussion and Analysis of Financial Condition and Results of Operations straight-line basis over the estimated useful lives of the assets. We account for  construction projects in accordance with Statement of Financial Accounting Standards No. 67, “Accounting for Costs and Initial Rental Operations of Real Estate Projects”. When we construct assets, we capitalize direct costs of the project, including fees paid to architects and contractors, property taxes, and certain costs of our design and construction subsidiary, MGM MIRAGE Design Group. The collectibility of unpaid markers is affected by a number of factors, including changes in currency exchange rates and economic conditions in the customers’ home countries. Because individual customer account balances can be significant, the allowance and the provision can change significantly between periods, as information about a certain customer becomes known or as changes in a region’s economy occur. The following table shows key statistics related to our casino receivables: We must make estimates and assumptions when accounting for capital expenditures. Whether an expenditure is considered a maintenance expense or a capital asset is a matter of judgment. When constructing or purchasing assets, we must determine whether existing assets are being replaced or otherwise impaired, which also may be a matter of judgment. Our depreciation expense is highly dependent on the assump- tions we make about our assets’ estimated useful lives. We determine the estimated useful lives based on our experience with similar assets, engineering studies, and our estimate of the usage of the asset. Whenever events or circumstances occur which change the estimated useful life of an asset, we account for the change prospectively.  In accordance with Statement of Financial Accounting Standards No. 34, “Capitalization of Interest Cost” (“SFAS 34”), interest cost associated with major  development and construction projects is capitalized as part of the cost of the project. Interest is typically capitalized on amounts expended on the project using the weighted- average cost of our outstanding borrowings, since we typically do not borrow funds directly related to a development project. Capitalization of interest starts when construc- tion activities, as defined in SFAS 34, begin and ceases when construction is substan- tially complete or development activity is suspended for more than a brief period. Whether we capitalize interest on a project depends in part on management’s actions. In October 2002, we announced the suspension of development activities on our wholly-owned project on the Renaissance Pointe land in Atlantic City. In connection with that announcement, we stopped capitalizing interest associated with the project. Interest capitalized on this project for the year ended December Property and equipment are stated at cost. Maintenance and repairs that neither materially add to the value of the property nor appreciably prolong its life are charged to expense as incurred. Depreciation and amortization are provided on a At December 31, 2004, a 100 basis-point change in the allowance for doubtful accounts as a percentage of casino accounts receivable would change net income by $1.1 million, or $0.01 per share. The allowance for doubtful accounts as a percentage of casino accounts receivable has decreased since 2002, the result of improved collections leading to improved credit statistics, reflected in the lower median age of accounts and decreasing  percentage of accounts outstanding over 180 days. Our reserve percentage is now consistent with the percentage before the September 11 attacks, and is representa- tive of a more normalized collection experience and positive global economic  conditions relative to the conditions in 2001 and 2002. Fixed asset capitalization and depreciation policies Y ear Ended December 31 (In thousands) 2004 2003 2002 Casino accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . $174,713 $159,569 $166,612 Allowance for doubtful casino accounts receivable . . . . . . . . . 57,111 75,265 85,504 Allowance as a percentage of casino accounts receivable . . . 33% 47% 51% Median age of casino accounts receivable . . . . . . . . . . . . . . . 33 days 43 days 50 days Percentage of casino accounts outstanding over 180 days . . . 15% 23% 27%