Explain if capital assets of a governmental unit (U.S.) should always
be reported on the same basis as a business (i.e. depreciated
historical costs)?

Hi.

You would have to look at the accounting conccept of consistency.
There is really nothing definite in accounting as people and indeed
govt.'s can always choose what they use, historical cost or not.
Consistency means that they shouldn't be changing it too often as that
would confuse people and make comparison hard. It makes sense though
because depreciated historical cost is one of the most accurate ways
of judging and determining the true value of an asset.

I DO NOT know a lot about US govt. accounting so do not take this as
an answer. Merely a comment.