Final answer:
GASB Statement No. 34 does not require governments to report bonds, notes, and long-term obligations at present value, which is contrary to the direct answer provided. Bonds are initially measured at the amount received and over time may change in value.
Step-by-step explanation:
It is important to understand that while the market interest rate and the borrower's risk influence real-world calculations, the price of a bond is always considered the present value of the future expected payments. Bond valuation always involves assessing the present value of expected future cash flows, which could include periodic interest payments and the return of principal at maturity.
The present value concept is based on the principle that money available today is worth more than the same amount in the future due to its potential earning capacity. When it comes to governmental accounting, the initial measurement of bonds is typically at the amount of money the government received (the face value, unless issued at a premium or discount). Over time, the value of these bonds may change in the accounting records based on amortization of the discount or premium and other factors.