To calculate the severity in euros, the value of the probability of occurrence is converted into a percentage value (by dividing by 5) in order to obtain a valid value in euros for risk assessment:

The potential extent describes the impact of the risk or opportunity on the company's economic result. It is often also defined as earnings impact (EBIT impact).

Materiality = (potential extent + probability of occurrence) / 2

The materiality level, on the other hand, is calculated using the average of the potential extent and the probability of occurrence, as this variant allows Materiality to be classified and compared more clearly. (Counter-example: With an already low probability of occurrence (1.5 = 30%), even the most serious risk (5) will remain insignificant unless the threshold value is lowered to a very low 1.5).

The probability of occurrence is rated on a scale of 0.5 to 4.5, as these are probabilities. A rating of 5 would mean a probability of occurrence of 100%, which would in fact no longer be a risk, but a certainty. As Risks by definition involve uncertainty, the scale remains below this absolute certainty.

If the materiality level exceeds the threshold value defined in the configuration, Impacts, Opportunities and Risks become material.

The materiality level as a numerical value between 0 - 5 is the first KPI that is displayed for IROs or topics and the second KPI that is displayed is whether an IRO or topic is material (display: yes) or not (display: no).