What type of asset is considered a trademark?

A trademark is classified as an intangible non-current asset because it represents a business's brand identity, such as its name, logo, or slogan, which can provide value for an extended period. Unlike tangible assets, which have a physical presence, intangible assets do not have a physical form. Trademarks are typically associated with the long-term benefits they bring to a business, such as distinguishing products or services in the marketplace and establishing brand loyalty among consumers.

Non-current assets are those that are not expected to be converted into cash or consumed within one year, aligning well with the nature of trademarks, which can last indefinitely as long as they are in use and protection is maintained. In contrast, options such as tangible non-current assets refer to physical items like machinery or buildings, current assets relate to cash and other assets expected to be converted into cash within a year, and liquid assets refer to cash or items easily convertible to cash, which do not apply to trademarks. Thus, the classification of a trademark as an intangible non-current asset effectively captures its enduring value and non-physical nature in a business context.