What are intangible assets?

Intangible assets are defined as non-physical assets that possess value, typically because they confer certain rights or privileges to the owner. Examples include intellectual properties such as patents, trademarks, copyrights, and brand recognition. These assets are critical for companies as they contribute to competitive advantages and can generate future economic benefits without having a physical form.

Patents allow a company exclusive rights to their inventions, while trademarks help in brand identity, distinguishing products from competitors. Unlike tangible assets, which can be quantified and easily assessed, intangible assets require careful evaluation for their market value and potential impact on a company's financial statements. This distinction solidifies the importance of option B, which accurately captures the essence of intangible assets in accounting and financial management.