VALUATION OF ASSET TAGGING
Saturday Brainstorming Thought (295) 04/10/2025
By:-Er. Avinash Kulkarni
9822011051
Chartered Engineer, Govt Regd Valuer, IBBI Regd Valuer,
Rera Certified Consultant, Black Money Act Regd Valuer
Valuation of Asset Tagging refers to how asset tagging enhances and informs the accurate valuation of assets for financial reporting, accounting and decision-making purposes
By assigning unique identifiers, asset tagging systems provide precise data on an assets condition, location and lifecycle
It is crucial for calculating depreciation, performing fair value assessments and ensuring compliance with accounting principles like GAAP
The process itself has a clear value by improving accuracy, reducing manual errors and saving time compared to manual methods
Impact of Asset Tagging on Asset Valuation
1) Accurate Depreciation Calculations
Tags provide data on asset age and condition, allowing for precise calculation of depreciation over time, which is essential for financial statements
2) Fair Value Assessment
By linking to a digital system, asset tagging helps in the assets verification, enabling accurate assessment of their current market or replacement value for financial reporting
3) Compliance and Auditing
Accurate asset records supported by tagging are vital for complying with accounting regulations, such as Generally Accepted Accounting Principles (GAAP) and for undergoing audits
4) Improved Asset Management
Tagging provides real-time data on asset location, condition and lifecycle, leading to better overall management and more informed decisions about investments and maintenance
Value of Asset Tagging Process
1) Enhanced Accuracy
By automating tracking and reducing manual data entry, asset tagging minimizes human errors in record keeping
2) Increased Efficiency
Automating data collection and integration with digital systems saves significant time and costs compared to manual tracking methods
4) Risk Mitigation
Better asset visibility and management help reduce risks associated with lost, stolen or mismanaged assets
Asset Tags
Asset Tags are a great form of security of Company Property
Asset Tags should be applied to fixed assets that have significant replacement cost and are easily moved, such as
1) Outdoor Assets
2) Laptops and PCs
3) Gear and Tool Boxes
4) Desk and Cell Phones
5) Utility Appliances
6) Printers, Scanners and Fax Machines
Printing Specs for Asset Tags
Quick Specs
1) Instant online ordering and pricing for Asset Tags sizes and materials
2) Materials – Polyester, Tamper Evident, Void and durable LexValu Plus TM
3) Adhesive – Permanent Asset Tag Specific
4) Over 20 standard background colour choices
5) Numbering – Barcode and Sequential – Code 39, Code 128 Standard
6) Sizes – Standard 1″ x 2″, 0.75″ x 1.5″, 0.9″ x 3.125″
Asset Tag Printing Basics
1) Assets Tags should feature a simple design to make communication of data quick and easy
2) Unlike other types of cards, there are only two must have features for asset tags
The company/organisation name and a
Barcode/ID number
Asset Tagging Calculations
1) Calculate the total investment cost
This is the sum of all expenses related to implementing the asset tagging systems
A) Initial Expenses
Cost of asset tags (eg barcodes, QR codes, RFID tags), scanners and any required hardware
B) Software and Integration
License fees for asset management software and costs for integrating it with existing systems
C) Implementation and Training
The cost of physically tagging assets and training employees on the new system
D) Ongoing Maintenance
The cost of replacing damaged tags and maintaining the system over time
2) Quantify the net profit (total savings and gains)
This represents the financial value of the benefits your company receives from the new system
Benefits of Asset Tagging
1) Reduced asset loss and theft
2) Improved asset utilization
3) Increased operational efficiency
4) Faster and most accurate audits
5) Enhanced financial reporting
6) Streamlined maintenance
Quantification of Asset Tagging
1) Value of lost or stolen assets before and after implantation
Tagged assets are more difficult to steal, and real-time tracking helps recover them quickly
2) Value of previously underused assets that are now better allocated
Tracked data reveals where assets are idle, preventing unnecessary purchases
3) Value of employee time and labour saved
Automated tracking dramatically reduces the time employees spend manually searching for and inventorying equipment
4) Value of the time and resources saved during auditing
Automated systems make audits faster and more precise, reducing the risk of penalties for non-compliance
5) Value gained from more accurate financial statements
Precise data on asset location, condition and depreciation improves financial reporting reliability and compliance with accounting rules like GAAP
6) Value of avoided maintenance costs and downtime
Tagging helps establish clear maintenance schedule, preventing costly breakdowns and extending asset lifespan
Examples of Potential Savings due to Asset Tagging
1) Construction sites can save a lot
Large jewellery store shows full cost recovery in four months
2) RFID tracking can boost asset utilization rates by 10-20% accordingly
3) In hospitals, nurses reportedly save 6000 hours per month by using tracking to find equipment
4) Approximately 90% reduction in asset search time during audits
5) Reduced likelyhood of penalties and more accurate financial provisions
6) Organizations using predictive maintenance can reduce costs as much as 20%
