Final answer:
Intangible assets are non-physical items like goodwill and patents that form part of a company's value. While tangible assets like collectibles may not yield high returns long-term, intangible assets can significantly affect a company's competitive edge and market differentiation. International laws aim to protect intellectual property, highlighting its importance in the global market.
Step-by-step explanation:
Intangible assets, unlike tangible assets like collectibles, are assets not physical in nature. These assets could be internal creations or part of a business acquisition, and include items such as goodwill, patents, trademarks, and copyrights. In contrast to tangible assets which might include valuable items like paintings, fine wine, and baseball cards that can depreciate or appreciate in value, intangible assets often relate to intellectual property and can offer advantages like product differentiation, a reputation for quality, or certain guarantees and services. They play a key role in the long-term value and competitive position of a company, although their valuation can be complex and subjective.
The investment return on collectibles is generally not expected to be higher than average over a long period, despite potential short-term increases in value. Meanwhile, intangible assets such as patents and copyrights also have legal protections that vary internationally, but efforts through the WIPO and treaties aim to harmonize laws to respect intellectual property across countries. Intangibles like brand reputation and advertising can strongly influence consumer preferences and differentiate products in the market, even when the physical product is similar.