What are intangible assets?

Intangible assets refer to non-physical assets that a company possesses, which have value due to the rights and privileges they confer. These can include intellectual property like patents, trademarks, copyrights, goodwill, and customer lists. Unlike tangible assets, such as machinery or buildings, intangible assets do not have a physical presence, but they can significantly contribute to the company’s value and competitive advantage in the market.

Understanding intangible assets is crucial in accounting as they may reflect future economic benefits and are often crucial for a company's operational success and brand strength. This classification directly impacts financial reporting and asset valuation, and recognizing their importance helps businesses in strategic planning and management.

The other options describe different aspects of financial statements. Physical assets refer to tangible assets, liabilities represent obligations rather than assets, and currency and cash equivalents are also tangible but do not encompass the concept of intangible assets.