The following points highlight the seven major limitations of financial reporting. 1. The objectives of financial reporting are affected not only by the environment in which financial reporting takes place but also by the characteristics and limitations of the kind of information that financial reporting, and particularly financial statements, can provide. The information is to a significant extent financial information [...]
In this article we will discuss about the limitations of economic income. Economic income has several difficulties. In fact there is no agreement as to the meaning of "better offness" that occurs in specific time periods. Also, this term is not well defined in case of business enterprises. The greatest problem lies in measuring the net assets at the beginning [...]
In this article we will discuss about the limitations of working capital concept of funds. One of the limitations of working capital concept of funds is that it omits a few major financial and investment transactions. Important information regarding changes in the resources of the firm and in the financial structure of the firm are omitted. Such items do not, [...]