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Stock Audit Glossary · Fixed Assets and Tagging

RFID Tag

RFID Tag: Definition

An RFID tag is an identifier containing a small chip and antenna that transmits its stored number by radio when energised by a reader. Because it needs no line of sight, tags can be read through packaging and several can be read at once, which is what distinguishes it from optical identifiers. Passive tags carry no battery and are powered by the reader's signal.

What Is an RFID Tag?

Every other identifier has to be seen to be read, and that single constraint is what RFID removes. Because the tag responds to radio rather than to light, a reader can pick up items inside cartons, behind panels or stacked out of view, and can read many of them at once rather than one at a time. Where the cost being avoided is somebody physically moving things to reach a label, that is the whole business case.

Two physical limits are commonly discovered after purchase rather than before. Metal reflects and detunes the signal, so a tag applied directly to a steel surface frequently will not read unless it is a type designed with a spacer for the purpose. Liquids absorb it, so tags near containers of fluid read unreliably. Both are solvable with the right specification at additional cost. The larger expense is usually neither the tags nor the physics but the readers and the software needed to interpret a stream of reads that records presence within a radius rather than at a precise location.

How RFID Tag Applies to a Fixed Asset Register

The register gains one field and one operational consequence.

  • The tag's stored number is held against the line alongside the human-readable identifier, and the two must not be allowed to diverge.
  • Where the same asset carries both an optical label and a radio tag, the register records both but treats one as the identifier of record, since two competing identities is how registers fragment.
  • Verification changes shape: a sweep returns everything present without anybody selecting items, so the exception list is produced by the reader rather than compiled by a counter.
  • That output needs interpreting before it reaches the register, because a read establishes presence within range rather than at a stated location.
  • Tags that fail to respond are recorded as unread rather than as absent, since a detuned tag on a steel surface is a labelling problem and not a missing asset.

How RFID Tag Works in Practice

  1. A tag carrying a chip and a printed antenna is fixed to the asset, chosen for the surface it will sit on, since metal and liquid both interfere with the signal.
  1. A unique number is written to the chip and recorded against the asset's line in the register, so the radio identity and the accounting record point at each other.
  1. A reader emits a radio field. A passive tag has no battery and draws the power it needs from that field, which is why it can sit dormant for years.
  1. Energised, the tag transmits its number back. Because nothing has to be seen, tags read through packaging and around corners, and many respond within a single sweep.
  1. The reader passes the captured numbers to the inventory or register system, which matches them against expected holdings and produces the exceptions: numbers expected and not heard, and numbers heard that nothing expected.

RFID Tag: A Worked Example

MeasureBarcodeRFID
Assets read per hour, one operatorAbout 180About 2,400
Line of sight neededYesNo
Cost per tagRs 4Rs 38
Tagging 6,000 assetsRs 24,000Rs 2,28,000
Annual verification time33 hours2.5 hours

A Chennai campus with 6,000 assets across nine floors compares the two before re-tagging.

The trade is capital against recurring effort. Tagging is roughly Rs 2.04 lakh dearer, and the annual count falls from roughly 33 hours to under 3 because assets are read through cupboard doors and inside cabins without being handled. Where that changes behaviour is frequency: a count that takes four days happens yearly, one that takes an afternoon can happen quarterly, and quarterly verification finds a missing asset while there is still a chance of tracing it. Metal-mounted assets need tags rated for metal, and a general-purpose tag fixed to a steel cabinet often will not read at all.

Common Mistakes With RFID Tag

Almost every disappointment here was predictable before the order was placed.

  • Fixing standard tags directly onto steel, where the surface detunes the signal and a large proportion simply will not respond. Order the variant built to stand off a conductive surface.
  • Siting tags against containers of liquid, which absorbs the signal and produces intermittent reads that look like missing stock.
  • Budgeting for the tags and not for the readers, when handhelds, portals and the software to interpret the reads are usually the larger cost.
  • Treating a successful read as proof of location, since the read confirms the tag was somewhere nearby, not that it sat in the position recorded.
  • Deploying across an estate without a pilot through one full operating cycle, so the failure mode appears at scale rather than on one floor.

Need Help With RFID Tag?

Reading about it settles the meaning and nothing else. The moment tag choice and register reconciliation are being decided together, the position has to be established independently, which is the substance of how we tag and track assets. A location list and the current records are enough to scope it.

When does RFID pay back over barcode?

Where the asset estate is large, verification is frequent, and assets are physically hard to reach individually. The saving is in verification hours, so infrequent counts rarely justify the higher tag cost.

What are the limitations of RFID for asset tracking?

Metal and liquid interfere with read reliability, tag cost is higher, and readers are needed at each verification point. It also reads tags in range indiscriminately, which can capture assets in adjacent areas.

Can RFID and barcode coexist in one estate?

Yes, and in most large estates they should. High-value or hard-to-reach assets carry RFID while the remainder carry printed labels, with a single common numbering convention across both so that the register remains one system rather than two.

Reviewed by the CA & CS Team, Patron Accounting LLP
Official sources: ICAIRBI
ICAI & ICSI registered  ·  Reviewed by CA Sundram Gupta (FCA)  ·  Last reviewed 20 August 2026  ·  Next review 20 November 2026

Definitions are reviewed against the standard or lender practice they describe, and restated when that moves.