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Calculating Straight Line Basis To calculate straight line basis, take the purchase price of an asset and then subtract the salvage value, its estimated sell-on value when it is no longer expected to be needed.

In-line space are locations that are non-end cap. Typical retail tenants that you will see in-line are nail salons, Subways, Dentists, and Dominoes. When choosing end cap vs in-line space, commercial retail tenants should consider their business needs first then evaluate the difference in price per square foot.

To calculate straight-line rent, aggregate the total cost of all rent payments, and divide by the total contract term. The result is the amount to be charged to expense in each month of the contract.

U.S. GAAP requires that operating leases expenses be recognized on a straight-line basis unless another systematic and rational basis is more representative of the time pattern in which use benefit is derived from the leased property, in which case that basis shall be used.

To calculate straight-line rent, aggregate the total cost of all rent payments, and divide by the total contract term. The result is the amount to be charged to expense in each month of the contract.

Rent Expense Under the Accrual Basis of Accounting Under the accrual basis of accounting, if rent is paid in advance (which is frequently the case), it is initially recorded as an asset in the prepaid expenses account, and is then recognized as an expense in the period in which the business occupies the space.

Straight-line accounting for rent expenses distributes the expense of your rental agreement evenly across the entire life of the lease. If you pay a deposit, that amount is included in your total lease expense to be distributed across the lease period.