Question from Kaplan

Identify whether each of the following is a limitation of applying ratio analysis to published financial statements or not.

(i) Limitation
(ii) Not a limitation

A) Financial statements often use historic cost, meaning that inflation is not taken into account

B) Complex items may not fit into any accounting standards and therefore may be omitted from the financial statements

Answer is A is limitation and B is not.

I studied in Regulatory Framework Measurement of kaplan book which said that historical cost has problem of inflation but it can be avoided through Control Purchase Price (CPP) or/and Current Cost Accounting (CCA). So how are we saying it is limitation as we can tackle this issue.