Asset valuation

Asset valuation provides a cost representation of what the organization stands to lose in the event of a major compromise. From the perspective of risk management, an asset is generally valued based on the business value and not only based on a simple acquisition or replacement cost. Business value is measured in terms of revenue loss or other potential impacts when an asset is compromised.

Determining the criticality of assets

The best way to determine the criticality of the asset is by performing a business impact analysis (BIA). A BIA determines the critical business assets by analyzing the impact of the unavailability of an asset on business objectives. In the case of a disaster, the identified critical assets are recovered and restored based on priority to minimize the damage.

To determine the business impact, two independent cost factors are to be considered. The first one is the downtime cost. Examples of downtime costs include a drop in sales, the...