What is the GASB standard regarding the reporting of other post-employment benefits?

The correct choice regarding the GASB standard for reporting other post-employment benefits (OPEB) is to book these benefits as fair market value. This standard, outlined in GASB Statement No. 75, highlights the importance of recognizing OPEB liabilities in a government's financial statements, as they represent a future obligation that affects both the financial position and the economic resources available to the entity.

By reporting OPEB liabilities at fair market value, governments ensure that the financial statements provide a more accurate and transparent portrayal of their financial health. This approach also facilitates informed decision-making for stakeholders, as it reflects the true cost of the benefits promised to employees after they retire. Fair market value can capture the anticipated future costs and the current obligations, aligning the reporting more closely with the actual economic reality faced by the government.

In contrast, other methods such as booking at historical cost or reporting benefits only when they are paid would fail to provide a comprehensive view of the liabilities associated with these benefits. Ignoring OPEB in financial statements would significantly understate the financial obligations of the entity, leading to a misleading representation of its fiscal condition. Therefore, using fair market value to report OPEB is critical for maintaining transparency and accountability in public sector financial reporting.