Final answer:
Companies must remeasure the fair value of liability-based stock-appreciation rights each period, which is a reflection of the dynamic nature of financial markets and ensures accurate financial reporting.
Step-by-step explanation:
The correct answer to this question is True. Companies indeed need to remeasure the fair value of liability-based stock-appreciation rights (SARs) each reporting period. This is because these financial instruments are considered liabilities and their value may change over time due to various market factors like stock price fluctuations.
Therefore, companies must update their valuation to reflect the current compensation cost that would be incurred if the SARs were to be settled at that time. This accounting treatment ensures that the financial statements accurately reflect the company's financial position regarding the provided stock-based compensation.