The joint API/ISO work group ISOTC67 SC5 WG2b formed in 1999 has been working to modernize the tubular performance properties equations of ISO 10400/API 5C3. In their latest draft (ISO/TR 10400:20071st edition), a Failure Assessment Diagram (FAD) limit state equation for estimating internal pressure resistance of a tubular product with a known toughness in a given environment is provided as an informative annex. Failure assessment diagram (FAD) is usually used to estimate the overall leak-proofness of a tubing within the whole range of plastic and ductile fracture. It is mainly composed of failure assessment curve and assessment points. Now, petroleum industries in the world accept API 5C3 as the common casing standard, which is deduced from classical electro-plastic mechanics methodology and formula and applied to designs according to external load of casing string and yield strength of the material. The applied yield design criteria merely satisfies the strength design requirement, but offers little consideration on the impact of casing manufacturing defects and thus is unable to provide accurate quantitative judgment and analysis for the possibility of casing environment-sensitive fracture. For casings with minor defects, the electro-plastic mechanics theory based strength design method is hardly applicable. It is required to introduce an alternative method based on modern fracture mechanics. Therefore, API 579 proposed failure assessment diagram for carrier pipes based strength design method. Based on API 5C3, API 579 and other relevant standards, ISO 10400: 2007 proposed the strength calculation method in consideration of casing manufacturing defects. Based on the actual operating conditions of casings, this paper introduces the relevant theories of fracture mechanics, proposes the failure assessment diagram based the strength design method and provides associated calculation examples.