Equity pool method is one of the accounting treatment methods for business combination, which is based on the assumption that business combination is regarded as the combination of owners' equity formed by equity exchange, rather than the transaction of assets, and the shareholders' equity in the new enterprise remains relatively unchanged after the merger.

In other words, it is the asset contribution of two or more business entities to the joint venture or group company, that is, the combination of economic resources. In the equity combination method, the original owner's equity continues to exist, and the previous accounting basis remains unchanged. The assets and liabilities of the merged enterprise continue to be recorded at their original book values, and the profits of the merged enterprise include the profits realized in the current year before the merger date; Retained profits accumulated in previous years should also be consolidated. The sword of equity is only applicable to the merger business with cross-abstraction of equity, and goodwill is not recognized on the books.