It provides a structural technique for identifying relevant assets (organized into asset groupings), potential vulnerabilities, and threats, integrating them into risks based on asset prices, vulnerability, and threat levels, and proposing appropriate countermeasures. It also aids in prioritizing risks and safeguards. Asset evaluation involves three steps: identify assets, evaluate assets, and select/implement safeguards. First, an organization identifies its assets by categorizing them as physical or intellectual. Physical assets include equipment, buildings, inventory, and intangibles such as customer information and trademarks. Intellectual assets include data, processes, people, and training materials. Second, the organization evaluates each identified asset to determine its value. Value can be estimated using replacement cost, net present value, or some other method. Third, the organization selects safeguards that reduce risk to an acceptable level by balancing benefits against costs. The best safeguards are those that provide maximum benefit at minimum cost. Asset evaluation is useful in risk analysis because it structures the process of considering various risks and their impacts. It also helps prioritize risks and safeguards since they are grouped by asset category. Finally, asset evaluation provides a basis for determining whether current security measures are effective so that they can be improved or replaced when necessary.