What are intangible assets?

Intangible assets are defined as non-physical assets that hold value for a company. This includes items that do not have a physical presence but still contribute significantly to a company's overall value and operations. Examples of intangible assets include patents, trademarks, copyrights, and goodwill. These assets can provide competitive advantages, legal rights, and brand recognition, which can have a substantial impact on a company's financial performance and market position.

In accounting, intangible assets are treated differently from tangible assets, such as buildings or machinery, since their value is not derived from a physical form. Instead, their worth is often linked to legal rights or the brand power they create. This distinction is crucial for understanding how companies assess their balance sheets and value their resources, as intangible assets can be vital to business success, especially in sectors like technology and consumer goods.