Who uses fair value accounting for non - financial assets after IFRS adoption ?

We examine whether and why companies prefer fair value to historical cost when they can choose between the two valuation methods. With the exception of investment property owned by real estate companies, historical cost by far dominates fair value in practice. Indeed, fair value accounting is not used for plant, equipment, and intangible assets. We find that companies using fair value accounting rely more on debt financing than companies that use historical cost. This evidence is consistent with companies using fair value to signal asset liquidation values to their creditors, and is not consistent with equity investors demanding fair value accounting for non-financial assets. Our evidence broadly speaks to the importance of accounting for contracting.