What do tangible assets include?

Tangible assets are physical items that can be touched, seen, and measured. They typically include items that have a definite physical presence. The correct answer encompasses land, buildings, equipment, and inventory, all of which are solid and can be perceived through the senses.

Land and buildings represent real estate assets, crucial in many sectors for their operational uses or investment potential. Equipment refers to the tools and machinery necessary for business operations, while inventory includes the goods available for sale. Together, these elements embody the foundational physical resources that a business owns and utilizes in its operations, reflecting their value on the balance sheet as tangible assets.

In contrast, intellectual property, goodwill, patents, and copyrights are intangible assets. These do not possess a physical form and therefore do not qualify as tangible assets. Intellectual property and patents relate to ideas, inventions, and brand identity, while goodwill reflects the value of a business’s reputation and customer relations, all of which, while valuable, fall outside the realm of tangible assets.