What can be classified as an intangible asset?

Patents are classified as intangible assets because they represent a non-physical asset that provides economic benefits to a business. Intangible assets are identifiable, non-monetary assets without physical substance. They are often long-term assets that can contribute to a company's revenue generation. Patents grant the holder exclusive rights to produce or sell a product for a certain period, thus providing a competitive advantage and potential profitability.

In contrast, real estate, office equipment, and cash are considered tangible assets. Real estate is a physical property, office equipment involves physical items used in operations, and cash is a liquid asset used for transactions. While all these assets are vital to a business, only patents fit the definition of intangible assets due to their non-physical nature and the specific rights and benefits they confer.