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Under ASC 840, the lease start date for accounting purposes is the date possession is passed from the landlord to the tenant. On that date, the lessee, or tenant, should begin recording straight-line rent expense even if that date is earlier than the ?commencement date? specified in the lease.

Accrued rent is a type of rent expense that has been recognized but not yet paid. It represents the difference in timing between paying rent and the actual cash payment of rent. In a traditional straight-line application, rent is expensed equally across the lease's entire term.

Straight line basis is also applied in operating leases, where it is used to calculate the amount of rental payments due under a lease agreement. The payments will be equal for each period until the end of the lease..

Under U.S. GAAP, rent in a company's financial statements should be recorded on a straight-line basis. To calculate monthly rent expense on a straight-line basis, you must first calculate the total cash paid for rent over the entire lease life and then divide by the number of months (i.e. 4 years = 48 months).

Calculating the straight-line expense of an asset is incredibly straightforward. You just take the total amount of lease payments and divide it by the number of months of the lease term.

Adjust the monthly straight-line amount for the remaining period by the amount of the monthly increase. For example, if your monthly payment was $1500 and increased by $150 per month, you should record $1,650 per month going forward.

However, to calculate straight-line rent expense, you simply add up total cash rent paid and divide by the lease term in months. For example, if rent is $50,000 total for a 5 year lease and the first year is free, then you would pay the $50,000 over 4 years at $12,500 per month.

The Straight-Line Rent report adds the rent amounts for the entire lease term, and then divides the sum by the number of months in the lease term. The straight line rent is calculated at the beginning of the lease for the entire term of the lease agreement.