This paper reviews the empirical literature on the determinants and decision usefulness of goodwill reporting. We structure our discussion around five guiding questions that reflect longstanding policy issues: recognition, initial and subsequent measurement, disclosure, and the role of governance and monitoring. In addition to summarizing the findings, we assess the validity of the evidence. Our review indicates that goodwill amounts, on average, are associated with the underlying economics of the combining firms but are also shaped by managerial incentives and institutional context. Empirical research does not allow us to conclude whether current goodwill accounting rules provide for an optimal degree of discretion. Nonetheless, our analysis yields a number of policy implications and research suggestions. In addition to pointing out new research questions that could be addressed by further archival research, we advocate reproduction studies to test the generalizability of existing findings across contexts, and we encourage standard setters to initiate quasi-experiments to generate causal evidence and to render policymaking more accountable. We further suggest that researchers make more use of behavioral theories and non-archival methods to elucidate the motives and interactions of decision makers in goodwill accounting.