This article first analyzes three accounting methods for purchased goodwill accounting treatment in some countries,and then points out their theoretical unfitness and realistical shortcoming, and finally suggests that goodwill should be recognized as a kind of permanent asset.

After analyzing the difference between self-generated goodwill and purchased goodwill,the paper focuses on the inherent unity of the both.

As the acquired is traded as an organic whole in mergers and acquisitions, the price the acquirer pays is often greater than the fair price of the identifiable net assets of the acquired, thus forming purchased goodwill.

Internally generated goodwill, externally purchased goodwill and negative goodwill should be related to a particular accounting entity.

The development of goodwill accounting theory and it s influence on our accounting principles;

Then, the paper proposes that human resource accounting should be carried out to solve the problems of goodwill accounting.

In this paper, we main discussed the two actual operation methods of accounting for goodwill on merger and acquisition which are represented by America and England respectively, furthermore, we compared the goodwill operations among part of countries.

With the development of property market, the exchange of property becomes common to us, while the accounting for goodwill will be a more important problem.