Assessment was made for reading and math by school. Math is at the level of end of Grade 1, and reading is at the entry level of Grade 1. But they said no because she has lots of friends in K, and she is happy in K, why give her pressure?
You will have to determine if the school is "anti-skip", "very cautious with skips" or "acceleration friendly". Many schools want to be sure that the child will still be in the top 10% AFTER the skip.
Have you had IQ and achievement testing done? I can't remember what age children need to be to take the WISC IV but you should probably wait until she can take that one. She may hit ceilings on the tests designed for younger kids.
This kind of data will help the school determine how quickly she learns.
The IOWA acceleration scale is another tool that is used to help determine if a child is ready to skip.