The characteristic feature of the method is that at any point in the sound field the conservation criteria are expressed in terms of the speed of propagation and the instantaneous values of the particle velocity, the excess pressure, and the excess density. These criteria, together with the adiabatic assumption, determine explicit relations between any two of these quantities. Excess pressure and excess density are here defined as departures from the equilibrium values that exist at the instant when the particle velocity is zero. For waves of finite amplitude, these equilibrium values, as well as the speed of propagation, are found to depend on the intensity. The increment in the speed of propagation does not agree with that obtained by classical methods of analysis. The discrepancy is found to be due to the omission in the classical forms of the continuity criterion of a term that specifies the effect of the rate of change in the speed of propagation. [Supported in part by Office of Naval Research Contract N 5ori‐07861.]