Radio Frequency Identification and Accounting RFID

1
Radio Frequency Identification and Accounting
(RFID)

• How is RFID being used in Government

Presented by Kevin J. McHugh Senior Vice
President Federal Government Services 1667 K
Street, NW, Suite 420 Washington, DC
20006 kmchugh_at_american-appraisal.com (202)
628-8800-tel [phone]-fax
2
How it Works
3
Who is Using RFID?
Source GAO Report GAO-05-551 Radio Frequency
Identification Technology
4
Who is Using RFID?(continued)
Source GAO Report GAO-05-551 Radio Frequency
Identification Technology
5
Where is it going?
Worldwide RFID spending is expected to total 504
million this year, up 39 percent from 2004. By
the end of 2006, new license revenue is expected
to total 751 million. By 2010, it is predicted
that worldwide RFID spending will surpass 3
billion.
Government RFID spending to grow 120 by 2009
Posted by ZDNet Research _at_ 132 pm US government
spending on RFID should grow 120 by fiscal year
2009, according to INPUT. RFID spending should
start to take off in fiscal 2007, as businesses
start demonstrating success in areas other than
just the supply chain process.
6
Legal Issues

• GAO asked the 24 CFOs if there were legal issues
  associated with RFID.
• Of the 16 respondents only one identified a
  potential legal issue associated with an
  individuals right to privacy and tracking
  sensitive documents and evidence

Source GAO Report GAO-05-551 Radio Frequency
Identification Technology
7
GAOs Summary

• RFID technology can provide new capabilities as
  well as an efficient method for federal agencies,
  manufacturers, retailers, and other organizations
  to collect, manage, disseminate, store, and
  analyze information on inventory, business
  processes, and security controls by providing
  real-time access to information. Several federal
  agencies have already begun testing and using the
  technology for access control and tracking and
  tracing assets and documents.

8
RFID Uses Today

• Inventory Control
• Detailed Inventory Costing
• Shipment Tracking
• E-Z Pass toll system
• Security at access points
• Document Tracking
• Pharmaceutical applications
• Counterfeit deterrence
• Shelf Life management
• Tracking

9
RFID Impact

• RFID could change current accounting standards to
  specific identification costing for inventory
  rather than LIFO or FIFO
• Improved asset inventories with less human
  intervention
• Auditors will analyze effectiveness and accuracy
  of both the information and implementation of the
  technology
• Integration with existing MIS structures
• Security and Privacy issues have to be examined
  in more detail for implications such as
  profiling, personal surveillance, authorized
  access to information, information stored on RFID
  tag, etc.

10
Conclusions

• Use of RFID Technology is expanding rapidly
• RFID costs are dropping, making it efficient to
  replace existing bar code technology in
  persistent applications such as asset control
• Improved inventory accuracy coupled with solid
  accounting information will improve the quality
  of the PPE information on financial statements