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March 18, 2026The Accounting Review

Exit-Price Liabilities: An Analysis of the Alternatives.

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Authors

LFLaurence A. FriedmanUniversity of Kansas

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Implication

This analysis demonstrates the use of market prices for liability valuation, suggesting implications for financial measurements.

Key Points

  • The study aims to explore the use of market prices for valuing liabilities in an exit-price accounting system.
  • Develops a theoretical structure based on Sterling's wheat trader model.
  • Examines Chambers's arguments against market prices.
  • Relaxation of restrictive assumptions in the wheat trader model.
  • Concludes that market price valuations enhance liability assessment.
  • Finds that traditional arguments against market prices do not invalidate the conclusions.
  • Suggests an alternative performance measure using the ratio of current interest cost to equity.

Cite This Study

Laurence A. Friedman (1978) studied this question.

synapsesocial.com/papers/69ba430d4e9516ffd37a3eb6https://doi.org/10.2308/tar-4482499
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Also Consider

Synapse has enriched 5 closely related papers on similar clinical questions. Consider them for comparative context:

  1. 1An Exit-Price Income Statement.1978
  2. 2Testing Comparability and Objectivity of Exit Value Accounting.1975
  3. 3Comparability and Objectivity of Exit Value Accounting: A Reply.1976
  4. 4Comparability and Objectivity of Exit Value Accounting: A Comment.1976
  5. 5Real estate worth: deriving consistent exit yields2026