What type of business assets do patents and trademarks fall under?

Patents and trademarks are classified as intangible assets because they represent non-physical rights that provide a competitive advantage to a business. Intangible assets are those that lack a physical presence but have value and can contribute to generating revenue.

Patents grant exclusive rights to inventions, while trademarks protect brand names and symbols, both of which can significantly enhance a company's market position and future earnings. This differentiation is key because tangible assets, such as machinery or buildings, have a physical form, while current assets and fixed assets pertain more to liquidity and duration, respectively, rather than the inherent value of non-physical rights. Thus, patents and trademarks are best categorized under intangible assets due to their nature and the benefits they provide to a business.