Which costs need to be recognized in the current year according to GASB No. 65?

The correct choice pertains to the treatment of debt issuance costs under GASB No. 65. According to this guidance, debt issuance costs are required to be expensed in the period incurred rather than being capitalized as part of a long-term liability, which was the previous practice. This change emphasizes the need for transparency and reflects the actual financial status of the reporting entity in the current year.

By recognizing debt issuance costs immediately, GASB No. 65 enhances the relevance of financial statements and provides users with a clearer picture of the expenses associated with issuing debt. This approach aligns with the broader goals of governmental accounting standards to improve financial reporting and accountability.

In contrast, professional service fees, future interest expenses, and administrative costs may be treated differently based on their nature and the specific context of their incurrence, potentially allowing for capitalization or different recognition practices that do not apply to debt issuance costs.