The Study, Based On New Accounting Standards, The Consolidated Goodwill

Goodwill has always been the focus of accounting. Among the recognition and measurement of accounting elements, goodwill is the most controversial one and still has different opinions on it now.This paper introduces different kinds of concepts of goodwill. Based on this, I'm trying to make goodwill connotations clear. I think we should distinguish whether the goodwill is created or purchased if we want to define what goodwill is precisely. Created goodwill is created by a variety of factors during certain company's operation. However, purchased goodwill is a product of corporate and acquisition activity between companies, and in fact, it is just a result that be used to keep account balance. And what's more, created goodwill is kept off from balance sheet because of its unreliable measurement. So, this paper is limited to discuss purchased goodwill only.Next, the article compare Chinese and foreign accounting standards in purchased goodwill, and find their differences. This paper selects American & international accounting standards, which are more mature, as the comparative object. It is not difficult to see that, the two foreign accounting standards are basically same. By comparison, Chinese accounting standards in goodwill has processed from immature to mature. While retaining certain Chinese characteristics, Chinese accounting standards ultimately keep pace with international practice.Because our new accounting standards has been carried out with major adjustments, especially in the guidelines of goodwill, this paper will focus on new accounting standards in the treatment of goodwill with the specific issues. At first, the article discusses the different impacts of different theories in goodwill measurement. But in China, we use compound theories instead of single theory so that the measurement of goodwill is more scientific. Then the article introduces the beginning as well as the follow-up measurement of the goodwill, and focuses on the later one, especially the impairment test. This method is totally new to China, so we should learn advanced foreign experience in order to use it more properly and correctly.Finally, this paper discussed the needed conditions to apply Goodwill Accounting Standards under our present situation, and makes prospect of it.