This option is selected in File > System Options.
If amortization is calculated monthly, then each month has the same amortization, no matter how many days it has. If amortization is calculated daily, then each day is treated equally; if you have straight line amortization, every day of the lease has the same amortization. Generally, monthly calculations are best if your fiscal periods are whole months or multiples of whole months (quarters, years). If your fiscal periods are day-based (such as 4-week periods, 4/5/4-week periods, etc., where the last day of the period is a constantly changing day of the month), daily calculations are best. If monthly calculation is chosen, no amortization is recognized on the 31st day of a month; all months are considered to have 30 days (in February, an extra two days of amortization is applied on the 28th, or one extra day on the 29th in a leap year). This is a “360-day year” methodology; a separate option applies the same methodology to rent and interest.
This choice is also used for level rent calculations. It is not, however, used for the calculation of cash rent accruals shown in the Income Statement/Balance Sheet Detail report.
See amortization method for a description of different amortization calculation methods available.
Related links:
Amortization Method | Amortization expense