Investors’ Perceptions of the Relevance of Credit Transactions Disclosure in Income Statement

This study focuses on assessing investors opinions on the RAFS (Relevance, Adequacy and Financial sustainability) of credit transactions disclosures in the income statement. It specifically assessed the investors' choice of RAFS in relation to two income statements (i.e the Traditional Income Statement (TIS) and the proposed Two Column Profit and Loss Account (TCPLA). The survey methodology was adopted and questionnaires were drawn to elicit information from investors in Edo state. Four hundred (400) investors were sampled. The mean scores of the investors' perceptions were analyzed and the t- test statistics was explored to test the hypotheses. The study found out that investors clamor for change in the TIS. Also, investors perceive both TIS and TCPLA to be relevant and financially sustainable while TCPLA was perceived to be more adequate than the TIS. These findings led the researcher to conclude and recommend a change in accounting reporting paradigm towards the disclosure of credit transactions