Final answer:
The city of Valley Ridge received a grant to update schools, which represents a revenue recognition requirement under GASB standards.
Step-by-step explanation:
The city of Valley Ridge received a state awarded grant to update four of the city's schools. The grant funds are released as work is completed, as a reimbursement. This represents a revenue recognition requirement under GASB (Governmental Accounting Standards Board) revenue recognition standards.
According to GASB standards, revenue should be recognized when it becomes both measurable and available. In this case, the funds become measurable and available when the work on the schools is completed. The city can then recognize the revenue and request reimbursement from the state.
It is important for the city to follow the GASB standards to ensure accurate and transparent accounting practices in reporting the grant funds as revenue