Explain in brief the limitations of full disclosure principle
Answers
Limitations of Financial Statements and Disclosure of Core Information. Abstract: There are at least two limitations related to current financial statements that have been widely explored. First, financial statements typically only reflect the results of value creation instead of the process of value creation.
Explanation:
The limitations of full disclosure principle are:
With full disclosure a business must comply with the GAAP (generally accepted accounting principles. This increases the cost of reporting and other expenses. Besides, dull disclosure principle brings a significant competitive disadvantage. However, the information can be modified. On the other hand, the public relation perspective and communication can be a disadvantage for the businesses.