While accounting for internally generated goodwill has been shown to have
received only limited attention from accounting theorists and standard set-
ters, this has not been the case with respect to purchased goodwill. The
reason for this is clear. The purchase of goodwill is an identiﬁable transac-
tion, unlike the development of internally generated goodwill. It results in
identiﬁable expenditure, often substantial, which requires to be accounted
for in some way because it ﬁts within the historical cost framework. This chapter examines the previous attempts to account for purchased goodwill.
The following chapter examines the prescriptions of the current Australian
and comparable international Standards.