What are the limitation of the conventional balance sheet?

Answer 1

The conventional balance sheet has several limitations, including its focus on historical cost, which may not accurately reflect the current market value of assets and liabilities. It provides a snapshot of a company's financial position at a specific point in time, making it less useful for assessing long-term performance or trends. Additionally, it often excludes intangible assets like brand value and intellectual property, which can be significant for many companies. Finally, it does not account for off-balance-sheet items, potentially leading to an incomplete view of a company's financial health.