What are the arguments that cost principle is not a satisfactory basis for the valuation of assets in financial statements based on?

The cost principle, which values assets at their historical cost, is often criticized for not reflecting current market conditions, leading to potential distortions in financial statements. This approach may undervalue assets that have appreciated over time and does not account for inflation or technological advancements that may render certain assets obsolete. Additionally, it fails to provide a realistic view of a company's financial health, as it overlooks potential impairments and the true economic value of assets. Consequently, stakeholders may be misled by outdated valuations that do not represent the present financial situation.