These excerpts taken from the AVII 10-K filed Mar 10, 2009.
The Companys operating lease agreement for its Corvallis facility provides for scheduled annual rent increases throughout the leases term. In accordance with SFAS No. 13, Accounting for Leases, and FASB Technical Bulletin No. 85-3, Accounting for Operating Leases with Scheduled Rent Increases, the Company recognizes the effects of the scheduled rent increases on a straight-line basis over the full term of the lease, which expires in 2020. During the years ended December 31, 2008, 2007 and 2006, the Company recognized $132,557, $155,411 and $177,568, respectively, in additional rent expense from the amortization of future scheduled rent increases.