Historical cost accounting Ball and Brown (1968) suggested that users found that financial information based

on HCA lacks in information for decision making. Spear (1996) also mentioned that the O&G (Oil & Gas) producing companies have used HCA to record the proved reserves for the last two decades. This measurement caused a stir in the market due to the lack of information about the value of this account and consequences of changes in current economic conditions (Liang & Wen 2006). Research has also suggested that HCA can be useful for users in the banking industry by providing sound information for investor during decision making process. By using HCA in provisioning and valuation of loan books to cover deteriorations, banks have gained positive reaction from investors as they are able to access neatly the risk of banks earnings (Anagnostopoulos & Buckland, 2005). Current Cost Accounting (CCA) Fixed asset revaluation should be taken into account when examining the relationship between CCA information and market reaction as asset revaluation refers to the adjustments of book value to the assets current value (Brown, Izan & Loh 1992). Furthermore, Estes (1968) argued that in terms of asset category, at least 80% of users found it useful. This is based on the responses of financial users in relation to the usefulness of current cost information. Nonetheless, many research have been conducted to investigate the relationship. According to Sharp & Walker (1975), based on 35 revaluation announcements of Australian firms during the period of year 1960 to 1970, it is shown that security prices have absorbed this information as it is valuable

to keep investors informed. On the other hand, Brown and Finn (1980) argued that 75% of the reactions may be affected by other announcements such as profit earnings and dividend payment. According to the research from 28 mining firms and 72 industrial firms, Easton et al. (1993) found out that the market has strong reaction to the asset revaluation for firms with high debt-to-equity ratio. In contrast, a research from United Kingdom showed that although the relationship between future performance and asset revaluation is strong within a short period of time which is one to three years after revaluation, firm with high debt-to-equity ratio has relatively weaker relationship between two variables compare to firm with low debt-to-equity ratio. Besides that, it also showed the strong relationship between two variables only occurred when the asset value increase consistently rather than the asset value is volatile (Abody et al., 1999). It is difficult to conclude that the increasing of fixed assets revaluation will lead to an increase in share price due to the different result from the studies. In fact, the markets reactions are affected by a number of factors such as assets leverage being revalued by others. The accounting framework, ownership and legal are different across the countries. Therefore, the findings from one country cannot be generalised easily. According to Duncan & Moore (1988), investors can make better decision making by using CCA financial statement information compare to historical financial statement.

Fair Value accounting Even though the findings support that HCA is useful for investor in banking industry, Barth & Landsman (2010) found that FVA provides more relevance and reliability accounting information. The findings claimed that HCA has less relevance of current market exchange values to the main users of financial statements. According to Linsmeier (2011), FVA is highly demanded by the market due to the bankruptcy of the banks in Global Financial Crisis (GFC) 2008. This is because FVA can provide more useful information in how much a bank worth when making investment decision. It is proven that FVA is leading a positive market reaction in banking industry. On the contrary, banks and creditors are more willing to offer debt financing to corporate that use FV to measure financial instruments (CFA Institute, 2010). Laux & Leus (2009) also argued that GFC in year 2008 had bank and investor to disagree with the statement that information on current price of a house is irrelevant for borrower when negotiating on new mortgage. This is because FV considers the amounts, timing and riskiness of the future cash flows attributable to it, therefore it is able to reflect the most current and accurate probability when assessing an assets value.