Under current GAAP, stock options and warrants are measured at the historical fair value of consideration received at issuance. The amount received is reported as an element of stockholders' equity.

Some theorists argue that stock options and warrants represent obligations of the issuing entity and should be reported as liabilities. Moreover, a more appropriate measure would be fair value of the options or warrants at the balance sheet date.

1: Argue for the current GAAP treatment for the issuance and subsequent reporting of stock options and warrants.