# Straight-line - No Proration; By Payment Cycle Method

Recognized in equal chunks, without proration, and based on the payment cycle 
(for example: quarterly, yearly, etc.) of the service.  

## When to use straight-line revenue recognition

:::warning

This revenue recognition method may not meet GAP ASC-606 requirements.

You might want to look at the [ratable daily revenue recognition](/docs/add-ons/revenue-recognition/revenue-recognition-ratable-daily) instead.

:::

Straight-line revenue recognition makes for very simple, easily understandable revenue 
recognition.

This method does not prorate, and tries respect the payment cycle 
(for example: quarterly, yearly, etc.) of the invoice. For example:

* Quarterly invoices will be split evenly across 3 months (even if the service period starts mid-month)
* Yearly invoices will be split evenly across 12 months (even if the service period starts mid-month)
* (Other payment cycles will be treated in a similar manner)

:::tip

Talk to your accountant or tax advisor!

Your accountant or tax advisor is your best resource for determining how your business should be recognizing revenue.

:::

## Example

Let's look at an example for a _quarterly_ invoice created on `Jul 20, 2025`, with
service dates of `July 20, 2025 - October 19, 2026` (a quarterly term).

| Period       | Month     | Revenue   | Explanation                    |
|--------------|-----------|-----------|--------------------------------|
| First period | Jul 2025 | 	$ 400.00 | One-third of the total revenue |
|              | Aug 2025 | 	$ 400.00 | One-third of the total revenue       |
| Last period  | Sep 2025 | 	$ 400.00 | One-third of the total revenue       |
| **Total** | | **$1,200.00** |