Lore

Lore gives a character a "natural" insight into discerning masked item properties. This insight continues to grow each time a character levels but at a rate determined by its class.

Candidate items requiring identification usually possess some sort of magical enhancement or property, but not always. Some books, potions and scrolls may also need to be identified using the Lore rating of the examining character. Cursed items are always very difficult to detect. The bard class, as part of their innate bardic lore background, are ideally suited for deciphering the hidden treasures that are unearthed.

To compare for a moment, "classic" D&D uses the Lore function (sometimes implemented as a character "skill") to help solve puzzles, determine the characteristics of creatures, discern the terrain or interact with NPCs through conversation, among many other uses. The expanded use is not, however, the case in Baldur's Gate (game) mechanics. It just identifies.

Description, from the Baldur's Gate (game) manual: "Each character has a lore rating. Every item has a lore value. If a character's lore rating is equivalent or higher than an item's lore value, then that character may identify that item.  As characters gain levels, they are able to identify items based on their experience.

''A character receives bonuses (and penalties) to their lore rating based on their Intelligence and Wisdom. The modifier is not cumulative with each level, but each ability bonus is applied separately. It is a "one-time" bonus at character creation."''

Assessing Lore's In-game Impact and Utility
In Baldur's Gate (game), an unidentified item which possesses one or more magical properties does not necessarily need to be identified (via Lore or by a merchant) to be used.

As a few examples: an unidentified Algernon's Cloak will still charm creatures and an unidentified Ring of Wizardry will still double the number of Level 1 mage spells. Also, the character screen will display any item's magical influence regardless of its ID status and the character animation will reflect the item's properties in the same manner (eg. an unidentified pair of Boots of Speed will still increase travel speed of its wearer). Notable exceptions to this game idiosyncrasy are the types of items which must be placed into Quick Item Slots (like wands), items which are not equip-able in those slots until identified.

The key, potential hazard of equipping unidentified items is the possibility of being cursed or poly-morphed. In a single-player environment, the danger is less critical since a preemptive save/reload can "undo" a player's hasty action. However, in a multi-player game, only a priest with at least 5 levels (or a visit to a temple) can restore a character's well-being. Resting will end the poly-morph effect unless the effect has been combined into a curse.

Generally-speaking, identifying every magical item can be expedited inexpensively with either a bard or mage who can write the Identify spell into their spellbook (with the exception of Conjurers like Edwin). An Identify scroll costs approximately the same as the merchant fee for identifying a single item so is economical for any arcanist member to have in their spell repertoire to use on demand.

Imoen, with her uncharacteristic thief INT level (17) is ideal for identifying low Lore value items like magical ammo and most +1 equipment using her Lore rating alone... with her seldom-enlisted roguish cousin, the bard, still better. Mages identify well with the initial Lore boost at character creation due to high INT level but level-up slower than thieves. In BG1, Garrick is a reliable, early-accessible bard to intermittently enlist for his utility Lore potential since he will readily dispatch and rejoin parties with just about any reputation... a boon of his neutral alignment. Evil Eldoth's membership may not be as easy to manipulate, depending on the party reputation. All bards can learn the Identify spell.

Item Lore Values
The following table displays the minimum Lore ratings needed to identify items found in Baldur's Gate (game):