What distinguishes intangible assets from tangible assets?

Intangible assets are defined as resources that do not have a physical presence or tangible form. This lack of physical substance means that unlike tangible assets, such as machinery, buildings, or inventory, intangible assets, like patents, trademarks, copyrights, and goodwill, cannot be touched or measured in physical terms. This distinction plays a crucial role in financial reporting and asset valuation, as intangible assets often represent significant value to a business despite their non-physical nature.

The other options present misconceptions about intangible assets. For instance, the idea that intangible assets have a physical substance contradicts their fundamental definition. While some intangible assets may be linked to digital formats, such as software or digital media, not all intangible assets are digital, making the suggestion that they are solely digital inaccurate. Additionally, the ease of sale is not a defining characteristic of intangible assets; their marketability can vary widely, and many are not as easily sold as tangible assets.