Objective: This paper presents a theoretical reassessment of the Extended Exergy Accounting method (EEA in the following), a comprehensive exergy-based analytical paradigm for the evaluation of the total equivalent primary resource consumption in a generic system. Our intent in this paper was to rigorously review the EEA theory and to highlight its double "valence" as a resource quantifier and to clarify its operative potential. On the one side, EEA can be properly regarded as a general "costing" theory based on a proper knowledge of the cumulative exergy consumption of different supply chains, economic systems and labour market: it is indeed the only method that translates externalities (capital, labour and environmental remediation) into cumulative exergetic costs and thus allows for their rigorous inclusion in a comprehensive resource cost assessment. Indeed, the extended exergy cost eec reflects both the thermodynamic "efficiency" of the production chain and the "hidden" resource costs for the society as a whole. From another, perhaps even more innovative, perspective, EEA can be viewed as a space and time dependent methodology since economic and labour costs can only be included in the Extended Exergy balance via their exergy equivalents (via two rigorously defined postulates). Since the equivalent exergy cost of the externalities depends both on the type of society and on the time window of the analysis, the extended exergy cost eec reflects in a very real sense both the thermodynamic "efficiency" of the machinery and the "conversion efficiency" of the specific society within which the analysis is performed. We argue that these two intrinsic features of the EEA method provide both additional insight in and more relevant information for every comparative analysis of energy conversion systems, both at a global and a local level. In the paper, traditional and advanced exergy analysis methods are briefly discussed and EEA theoretical foundations and details for its application are described in detail. Methods: The method converts not only material and energy flows, but externalities as well (labour, capital and environmental costs) into flows of equivalent primary exergy, so that all exchanges between the system and the environment can be completely accounted for on a rigorous thermodynamic basis. The current emphasis decision makers and by public opinion alike seem to be placing on sustainability generates the need for continue research in the field of systems analysis, and a preliminary review confirms that exergy may constitute a coherent and rational basis for developing global and local analysis methods. Moreover, extended exergy accounting possesses some specific and peculiar characteristics that make it more suitable for life-cycle and cradle-to-grave (or well-to-wheel) applications. Results: Taxonomy for the classification of exergy-based methods is proposed. A novel assessment of the EEA method is provided, its advantages and drawbacks are discussed and areas in need of further theoretical investigation are identified. Conclusions: Since EEA is a life-cycle method, it is argued that it represents an improvement with regard to other current methods, in that it provides additional insight into the phenomenological aspects of any "energy conversion chain". The paper demonstrates that the Extended Exergy cost function can be used within the traditional and very well formalized Thermoeconomic framework, replacing the economic cost function in order to evaluate and optimize the consumption of resources of a system in a more complete and rational way. Practical implications: This paper contains some specific proposals as to the further development of the EEA method, to increase its effectiveness and to improve its practical applicability for system analysis. Suggestions are made on how to include an EEA discussion in the current debate about sustainable development. (C) 2013 Elsevier Ltd. All rights reserved.