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The standard risk formula in ISO-based frameworks is:

Risk = Probability × Consequence

This approach allows comparison and prioritization of risks based on both likelihood and impact.

Exact Extract from ISO 55002:2018, Clause 8.2.2 – Risk Management:

“Risk is typically evaluated by considering the probability of occurrence and the consequences of such events.”

According to PAS 55 and ISO 55001 , the hierarchy flows from high-level principles and intent (policy) to detailed tactical execution (plans) :

Policy – Organizational intent and principles

Strategy – Long-term approach for achieving objectives

Objectives – Specific performance and capability targets

Plans – Scheduled actions to meet objectives

Exact Extract from PAS 55-1:2008, Section 4.2.1:

“The asset management policy leads into the asset management strategy, from which objectives and corresponding plans are derived.”

Effective asset management is a driver for multiple benefits, including operational excellence, regulatory compliance, stakeholder trust, and cost control. These outcomes are explicitly stated as the goals of adopting ISO 55000 principles.

Safe operations result from well-maintained and risk-managed assets.

Cost optimization is achieved through lifecycle planning.

Regulatory compliance is improved via standardized governance processes.

Exact Extract from ISO 55000:2014, Clause 2.4 – Benefits of Asset Management:

“Effective asset management supports the realization of value from assets and can contribute to improved financial performance, informed asset investment decisions, managed risk, and demonstrated regulatory compliance.”

Again, the recognized method for risk evaluation aligns with ISO 31000 and ISO 55000:

Risk = Probability × Consequence

This is used across risk matrices, risk registers, and decision frameworks.

Exact Extract from IAM – Risk Management in Asset Management:

“The basic formula for quantifying risk is: Risk = Likelihood × Consequence.”