Step 1: Determine the payments for the entire reporting period

Determine the payments for the entire reporting period selected for the report and sum them up.

For example:

Lease Start Date = 05/01/2013 and Lease End Date = 02/27/2014.

First payment is on 06/02/2013

Lease term is 10 months, 1 month ”free rent” (May 2013) and 9 monthly payments (include stepped payments in 2014).

Note: As a convention, lease terms should be in complete months, that is, the Lease End Date should be one day prior to the Lease Start Date anniversary. In this example, 06/01/2014 for 1 year lease term. Or, 03/01/201 for 10 month lease.

Lease terms in full years, or six month intervals are more common .For example, a typical lease term would be: 6 year lease term with lease start date 7/15/2010, and lease end date 7/14/2016. Avoid using the lease end date 07/15/2016 matching anniversary date.

Calendar of payments (Base Rent):

Q2 2013:

• 05/02/2013 – 0 (free rent)
• 06/02/2013 – 10,000.00

Q3 2013

• 07/02/2013 – 10,000.00
• 08/02/2013 – 10,000.00
• 09/02/2013 – 10,000.00

Q4 2013

• 10/02/2013 – 10,000.00
• 11/02/2013 – 10,000.00
• 12/02/2013 – 10,000.00

Q1 2014

• 01/02/2014 – 20,000.00 … (stepped rent)
• 02/02/2014 – 20,000.00

If you run the report from Year 2013 to Year 2014

TOTAL OF Base Rent PAYMENTS =110,000.00

Step 2: Calculate the straight-line rent as an average based on the Group By option

The following describes the calculations for different group by options.

• WHEN Group By = MONTH
  • Calculate the number of month in the reporting period (our case = 10 MONTHS); 1 Free Month + 9 scheduled payments. (Do not go below Lease Start Date or above Lease End Date !)
  • Divide the TOTAL OF PAYMENTS by the number of months (including Free Rent) in the reporting. Ex = 110,000.00/10 months = 11,000.00 PER MONTH

	05/ 2013	06/ 2013	07/ 2013	08/ 2013	09/ 2013	10/ 2013	11/ 2013	12/ 2013	01/ 2014	02/ 2014
Base Rent	0	10,000	10,000	10,000	10,000	10,000	10,000	10,000	20,000	20,000
Straight Line	11,000	11,000	11,000	11,000	11,000	11,000	11,000	11,000	11,000	11,000

• WHEN Group By =QUARTER
  • Calculate the number of quarters in the reporting period (our case = 4 QUARTERS). (Do not go bellow Lease Start Date or above Lease End Date!)
  • Calculate the TOTAL OF PAYMENTS by the payments received by quarters; in 2013 Q1 (Jan – Mar) … 2013 Q2 (Apr-June) … 2013 Q3 (July-Sept.) … 2013 Q4 (Oct-Dec) … 2014 Q1 (Jan-Mar). Ex = results in $ 110,000.00 cumulative total for both Base Rent and S/L Rent.

	Q1/ 2013	Q2/ 2013	Q3/ 2013	Q4/ 2013	Q1/ 2014	Q2/ 2014	Q3/ 2014	Q4/ 2014
Base Rent	0	10,000	30,000	30,000	40,000	0	0	0
Straight Line	0	22,000	33,000	33,000	22,000	0	0	0

• WHEN Group By =YEAR
  • Calculate the number of years in the reporting period (our case = 2 YEARS). (Do not go before the Lease Start Date or after the Lease End Date!)
  • Divide the TOTAL OF PAYMENTS by the number of years in the reporting period.
    • Example - Base Rent Annual Total = 10,000.00 x 7 payment in 2013; and 20,000 x 2 payments in 2014
    • Example - S/L Rent Annual Total = 11,000.00 x 8 payment in 2013; and 11,000 x 2 payments in 2014

	2013	2014
Base Rent	70,000	40,000
Straight Line	88,000	22,000