Which of the following best describes intangible assets?

Intangible assets are defined as non-physical assets that carry value for a business and can provide long-term benefits. They include items such as patents, trademarks, copyrights, and goodwill. These assets do not have a physical presence, meaning they cannot be touched or seen, yet they hold significant importance in differentiating a company's products and establishing competitive advantages.

Recognizing intangible assets is essential for accurately assessing a company's value, as they can contribute to sales and customer loyalty without being tangible items like machinery or inventory. This definition aligns perfectly with the choice that describes assets as lacking physical substance, highlighting their nature and significance in corporate finance.

In contrast, the other options describe different types of assets or liabilities. Physical items of value refer to tangible assets, debt obligations pertain to amounts a company owes, and short-term investments in stocks represent a specific category of financial assets that can be liquidated easily, which are not classified as intangible. Understanding this distinction helps in accurately categorizing assets on financial statements and assessing a company's overall health.