What are intangible assets?

Intangible assets are defined as non-physical assets that contribute value to a business. These are assets that cannot be seen or touched but have significant importance in terms of generating revenue and providing competitive advantage. Examples include trademarks, patents, copyrights, goodwill, and brand recognition.

Their value is derived from the rights and privileges they confer, which can enhance a company's ability to operate and succeed in the marketplace. Unlike physical assets, such as machinery or buildings, intangible assets are not tangible objects, yet they can often represent a substantial part of a company’s overall value on its balance sheet.

The other choices describe characteristics that do not align with the definition of intangible assets. For instance, physical items refer to tangible assets, while liquid assets pertain to cash or easily convertible securities. Assets with a fixed value do not encapsulate the dynamic nature of intangible assets, which can fluctuate based on market conditions and the performance of the business.