While GAAP provides a robust framework for financial reporting, it is not without limitations:
Complexity: GAAP can be complex and difficult to implement, especially for small businesses with limited resources. Flexibility: Although GAAP sets out specific rules, it may not accommodate every unique business scenario, sometimes requiring professional judgment. Global Differences: GAAP is primarily used in the United States. Other countries may follow different standards, such as IFRS, making international financial comparisons challenging.