Companies (notably Kodak) paid amounts greatly in excess of book value for another company, and under previous reporting standards attributed much of this excess price paid to the acquired company's in-process R&D. Why was allocating the excess to in-process R&D considered preferable to allocating it to tangible assets or to goodwill? Which of the following is correct?

a.The consolidated debt/equity ratio would be lower.

b. Future consolidated income would be higher.

c. Consolidated total assets would be higher.

d. It would then not be necessary to report consolidated financial statements.