There are three different opinions on how to handle purchased goodwill:① Recognize and amortize an asset during the period of expected validity; ② Directly counteract the shareholder s ownership; ③ Regard as a lasting asset unless it is obviously impaired.

There are three methods of accounting for purchased goodwill: systematic amortization, capitalization without amortization, and immediately write-off against equity.

In general, the difference between the cost of acquisition and fair value of net assets of business share is confirmed as purchased goodwill.

Consolidated goodwill is the banlance that investment cost of parent corporation invested to subsidiary corporations higher than the net assets of subsidiary corporations.

The consolidation goodwill, being as an intangible resource, has already caused the people s extensive concern.

This paper analyses the relationship between consolidations and consolidated financial statements,points out the limitations of consolidated statements,and discusses several popular theories,methods,accounting for consolidation goodwill,scope of consolidated statements and accounting for unconsolidated companies.

Using factor analysis method, we can see that there are differences and connections among consolidated difference equity, investment discrepancy and combination goodwill.

The issue of goodwill, always is the focus of the accounting theory, common accounting theory believed that the goodwill divides into two parts: the internally generated goodwill and the combination goodwill (also called purchased goodwill).