Final answer:
Historical cost is not recommended by GASB for remeasuring asset or liability values on financial statements, unlike fair value, current replacement cost, and present value of future cash flows.
Step-by-step explanation:
The GASB (Governmental Accounting Standards Board) concept statements address how governmental financial information should be presented. According to GASB guidance, there are certain methods recommended for measuring and reporting assets and liabilities. The recommended methods include:
- Fair value: the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
- Current replacement cost: the cost that would be incurred to acquire the same or an equivalent asset on the measurement date.
- Present value of future cash flows: the current worth of a future stream of cash flows discounted at a rate appropriate for the nature of the cash flows and the type of asset or liability.
Historical cost, the original cost of acquiring an asset or the amount of a liability when it was incurred, is not one of the methods recommended by the GASB for the remeasured amount on financial statements, making option (b) the correct answer.