What is a straight line rent recognition schedule. I'm looking at duty responsibilities for a property accountant. Listed is that as a property accountant you will need to know how to prepare and or review straight line rent recognition schedules in accordance with applicable leases. I'm familiar with the straight line method for long term assets but not with rent revenue.

Can someone explain what confused confused straight line rent is:confused:

Although I have never heard that exact term I would imagine this is what is has to be:

Say you lease a building to a tenant for one year and it is all paid up front say for $12,000 for one year.

Your first entry would be:

Db Cash 12,000
Cr unearned rent rev 12,000

Then each month you move 1/12 of the total to revenue from unearned, like so:

Db unearned rent revenue 1,000
Cr Rent revenue 1,000

I gave a simple example but in reality this would not be much harder. They key is just to recognize the revenue as it is earned. Straight line because you are recognizing the same amount each period.

Straight line rent expense is a GAAP requirement. So, if you have a lease for five years (60 months) and there are increases in the rent amount for year 3 and 5, and you also received the first two months of rent free, you have to straightline the entire obligation. You would determine the number of months for the lease, determine the total obligation for the lease and then straight line the total obligation over the number of months in the lease. Since you received two months rent free, by this straightlining method you will still recognize some rent expense in those two months. You can build an amortization schedule where you take the smoothed rent expense and the actual amount paid to reflect the increases and decreases in your Balance sheet account for the straight line rent.