GASB standards require that general capital assets be recorded in government-wide statements at which cost basis?

• A. Amortized cost.
• B. Replacement cost.
• C. Fair value.
• D. Historical cost.

Answer: (D)

General capital assets are recorded in government-wide statements at historical cost. This means the amount paid to acquire or construct the asset, plus any costs to bring it to use, is capitalized and then depreciated over the asset’s estimated useful life to reflect the consumption of service potential. Using historical cost provides a stable, accrual-based measure tied to the government’s investment and its long-term use, rather than fluctuating market prices. Replacement cost or fair value would capture current prices or market conditions rather than the asset’s life-cycle use, so they’re not the standard basis for these assets in government-wide reporting.