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Risk Exposure Value Calculator

Work out risk exposure value instantly with clear inputs, formula shown and shareable results.

About Risk Exposure Value Calculator

Annualised risk exposure is probability multiplied by impact and expected frequency. Applying control effectiveness converts inherent exposure into residual exposure, and the difference is the value your controls deliver — which is what justifies their cost.

Formulas

Inherent exposure

Inherent = Probability x Impact x Annual frequency

Residual exposure

Residual = Inherent x (1 - Control effectiveness %)

Worked example

With the default values below, Risk Exposure Value Calculator returns Residual annual risk exposure of $120,000.00. Change any input above and every figure here is recalculated in your browser.

Inputs used

Probability of occurrence in the period
12
Financial impact if it occurs
2,500,000
Control effectiveness
60
Expected occurrences per year if unmitigated
1

Results

Residual annual risk exposure
$120,000.00
Inherent (pre-control) exposure
$300,000.00
Reduction achieved by controls
$180,000.00
Residual exposure as % of worst-case impact
4.80%

Step by step

  1. 1Values used
  2. 2Inherent exposure
  3. 3Residual exposure
  4. 4Residual annual risk exposure= 120,000.00
  5. 5Inherent (pre-control) exposure= 300,000.00
  6. 6Reduction achieved by controls= 180,000.00
  7. 7Residual exposure as % of worst-case impact= 4.80

Assumptions and limits

  • The result is derived only from the 4 inputs listed above. Anything not among them is not part of the calculation.
  • In particular, this calculator does not take inflation, tax or fees or charges into account.
  • Figures are rounded for display to 2 decimal places, so totals built from several rounded parts can differ slightly from the unrounded arithmetic.
  • This is an estimate for general information and not professional financial, tax or legal advice. See the full disclaimer for the limits that apply to this kind of calculator.

How these calculators are built and tested is described on the Methodology page. If a figure looks wrong, please report it.

Frequently Asked Questions

How do I estimate control effectiveness?

From testing evidence: how often the control operated as designed, and how much of the impact it would actually prevent. Self-assessed effectiveness is usually overstated.

Should I spend up to the residual exposure on controls?

Spend up to the reduction in exposure a control delivers, not the exposure itself. Beyond that the control costs more than the risk it removes.

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