What question did this study set out to answer?

The research aims to establish a contract basis of accounting as a viable alternative to the traditional exchange basis.

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March 18, 2026

Towards a Contract Basis of Valuation in Accounting.

Key Points

The research aims to establish a contract basis of accounting as a viable alternative to the traditional exchange basis.
Analysis of various types of executory contracts.
Evaluation of purchase commitments, forward contracts, stock options, and leases.
Development of a coherent valuation model.
Proposed a logical framework for valuing executory contracts.
Demonstrated applicability across multiple types of contracts.
Highlighted the limitations of traditional exchange-based valuation methods.

Abstract

Abstract ABSTRACT: This article provides a rigorous development of a contract (or commitment) basis of accounting as an alternative to the exchange basis in present use. Specifically, the analysis deals with the valuation of executory contracts including purchase commitments, forward contracts in foreign exchange, employee stock options, and leases. Notwithstanding the severity of assumptions, the analysis provides a coherent, logical, and widely applicable model of valuation in accounting.

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