Presently many assets are still tagged by labels, steel plates or have numbers painted onto them but the confusion prevails. In the recent past many progressive companies have some sort of automatic identification systems like bar codes in place, but they may not cover all assets, or the paste-on tags themselves get lost, dirty or otherwise damaged.

They cannot be read in most of these cases, leaving behind open questions from auditors and a red-faced management trying to explain, convince and cajole the auditors into not mentioning these slip ups in the annual reports.The total value of these assets is a huge figure on the balance sheets. Even if the present value of the assets is not shown to be high (because of depreciation) the actual replacement cost of these assets is substantial. It is therefore an essential task of all company managements to have a better asset identification and tracking system in place.