When we convert a transfer function of LTI system into state space model, is there any loss of information due to the cancellation of pole zero? Transfer function doesn't support unobservable poles.
No, you don't lose information when you convert from a transfer function to a state-space model (A,B,C,D) because you can always recover the transfer function from
C(SI-A)^{-1}B+D. You lose information when you transform from a non observable or non controllable state-space model to a transfer function model due to pole-zero cancellation.
@Nandan, I do not think that any loss of information appears. Someone should take care for concrete system for which the state-space model is to be adopted, that all state-space variables should be real physical quantities and measurable!
Possibly... if you transform your state-space model (A,B,C,D) into a transfer-function, you'll lose information about the states. So, if your states represent physical values (as opposed to e.g. modal states in the Jordan canonical form), this information is not available in the transfer-function.
No, you don't lose information when you convert from a transfer function to a state-space model (A,B,C,D) because you can always recover the transfer function from
C(SI-A)^{-1}B+D. You lose information when you transform from a non observable or non controllable state-space model to a transfer function model due to pole-zero cancellation.