Straight-Line Rent Schedules

A commercial lease charges 2,000.00 a month in year one, 2,100.00 in year two, and 2,200.00 in year three — but for accounting purposes, the rent should be recognized evenly across the whole term, not stepped. That even figure is straight-line rent, and the gap between it and the cash actually billed is the deferred-rent balance that accounting standards such as ASC 842 and IFRS 16 (the US and international lease-accounting rules) ask you to track. This article shows you how to switch the feature on, generate a schedule, and read it line by line — the linearized rent, each month's adjustment, and the running receivable that builds up and unwinds to zero. Where accounting judgment is involved, check with your accounting team; this article explains the tool, not the standard. No prior REDA experience is assumed.

Why straight-line

When cash rent escalates over a lease, the money you collect rises step by step, but the value the tenant receives each month — the use of the space — doesn't. Straight-line recognition smooths the rent into one constant monthly figure, the linearized rent, calculated across the entire term. In the early, cheaper months you recognize more than you bill (building a receivable); in the later, dearer months you recognize less than you bill (unwinding it). By the end of the lease, the receivable returns to zero. REDA builds the whole schedule for you, month by month, so you have the numbers without a spreadsheet.

Switching it on

A charge is included in a straight-line schedule only when a chain of conditions is met. Miss any link and the charge is silently left out:

Generating a schedule

There are three ways a schedule gets built. You can trigger one on demand with the Calculate Straight-Line Schedule action on the lease — a short screen that first checks the lease is a lease, is accounting-active, has straight-line enabled on its rule, and has a property. When a relevant charge changes, REDA also flags the lease as pending straight-line calculation, so it can be swept up automatically. That automatic sweep runs as a background job — but like most billing runs, it isn't scheduled out of the box:

Reading the schedule

A straight-line schedule has a header that summarizes the whole term, and one row — a period — per calendar month. The header's roll-ups build to the single most important figure, the linearized rent:

Reading a period

Each period is one calendar month of the term. Its name is written by REDA as a year-month key — 2026-01, for instance — and the numbers on it trace the recognition for that month:

The Straight-Line Adjustment is the heart of it: a positive figure means you recognized more than you billed (deferring rent into a receivable), a negative figure means you recognized less (unwinding it). The Account Receivable column accumulates those adjustments and, over a balanced schedule, returns to zero at the final period.

A note on the period-name message

Periods are named automatically, and you shouldn't rename them. If a validation ever fires on the period name, be aware of a quirk in its wording:

The message says "MM-yyyy," but the format REDA actually writes and accepts is year-month (yyyy-MM, e.g. 2026-01). The wording is misleading; the behavior is what counts. Leave period names as the system sets them.

Worked example: a three-year step-up on Harbour Tower Suite 300

Harbour Tower Suite 300 is a commercial lease that runs 36 months of full months, no discounts, with the rent stepping up each year: 2,000.00 a month in year one, 2,100.00 in year two, and 2,200.00 in year three. The total cash rent is (12 × 2,000.00) + (12 × 2,100.00) + (12 × 2,200.00) = 75,600.00 over 36 months, so the linearized rent is 75,600.00 ÷ 36 = 2,100.00 a month — which, for an evenly-stepped lease like this, lands right on the middle year's rent. Here's how the adjustment and the receivable move:

In year one you bill 2,000.00 but recognize 2,100.00, so each month adds 100.00 to the receivable — which peaks at 1,200.00. Year two bills and recognizes the same 2,100.00, so the adjustment is zero and the receivable simply holds. In year three you bill 2,200.00 but still recognize 2,100.00, so each month draws the receivable down by 100.00, landing it back at zero as the lease ends.

Partial months prorate too. If this lease had started on 16 January (a 31-day month) with advanced proration on, that first period's Month Weight would be 16 ÷ 31 ≈ 0.516 and its prorated cash rent 2,000.00 ÷ 31 × 16 = 1,032.26; with advanced proration off, the weight would simply be 0.5. The same daily-rate logic as ordinary Proration runs here.

The Harbour Tower Suite 300 straight-line schedule: its 36 months and 75,600 of total prorated rent resolve to a Linearized Rent of 2,100.00, and it is flagged as the latest schedule for the lease.

The period list: each month's cash rent set against the flat 2,100 linearized rent, with a +100 adjustment in year one that unwinds to zero later, and a running receivable that climbs to 1,200 by month twelve before drawing back down.

When it doesn't calculate

If the action reports no lease or no charges, the engine couldn't find something it needs:

"Opportunity Charges Not Found." almost always means no charge qualified — walk the eligibility chain: the rule's straight-line flag, the charge code's Include In Straight-Line Calculation flag, the recurring From/To dates, and that any linked ticket is Closed.

Where to go next

1. How Billing Works in REDA — the charge model straight-line reads from.
2. Proration — the daily-rate math behind the partial-month periods.
3. Charge Codes — the Include In Straight-Line Calculation flag.
4. Scheduling Background Jobs — the sweep job that drives automatic recalculation.
5. The REDA Financials Bridge — where the deferred-rent adjustment is booked.

Frequently asked questions