What are considered intangible assets of an enterprise?

Intangible assets refer to non-physical assets that contribute to the value of an enterprise and provide a competitive advantage. Patents, copyrights, and trade secrets are classic examples of intangible assets because they represent legal rights and intellectual property that can enhance a company's profitability and market position.

Patents provide exclusive rights to inventions, preventing others from using that invention without permission, thus offering the patent holder a potential edge in innovation and market share. Copyrights protect original works of authorship, such as literature, music, and software, allowing companies to monetize their creative outputs. Trade secrets safeguard proprietary information that gives a business an advantage, like formulas, practices, and methods that are not publicly known.

In contrast, physical properties of a company, such as real estate and equipment, are tangible assets and do not fall into the category of intangible assets. Employee-generated ideas on their own do not constitute intangible assets unless they are formalized into intellectual property like patents or are otherwise protected. Finally, while trademarks and copyrights are intangible assets, the choice that includes patents, copyrights, and trade secrets covers a broader range of what constitutes intangible assets.