Area diameter line item is to bill a customer according to square meterage.
Sometimes rent is calculated per meter, and not per square meter.
So the Area diameter line item takes it's rate in meters.
To calculate the final value, it takes the square root of the area specified under Edit->Meter Account:Area of Premise then multiplies with the given rate in Edit->Tariff Rates.
To setup an Area diameter line item,
1) select your tariff (or add a new tariff)
2) Under Edit->Tariff Line Items, add a line item and set the Tariff Type to Area diameter charge
3) Under Edit->Tariff Rates, set the rate (in meters)
4) Under Tools->Check Tariff Validity, verify the tariff
5) Under Edit->Meter Account, link the tariff to the meter account, and Area of Premise to the desired area.
6) You might not be able to go to the meter's profile graph, but you can run a provisional bill by going to View->Provisional Bill and providing the start and end date.
7) On the bill you will see the area in m2, as well as the Rate in Rands per meter, and the Amount as [square root of area x rate]