What concept implies that equipment is installed and continually used for generating income?

The value-in-use concept is pivotal in understanding how certain equipment generates income over time. This concept recognizes that the value of an asset is determined not just by its sale price or market value, but by the benefits it provides through its use in operations or production. When equipment is installed and actively utilized to create income, its worth is tied to its ability to contribute to revenue generation, reflecting a more intrinsic form of value related to its ongoing utility rather than its potential resale value.

This approach emphasizes the operational aspect of assets, which is crucial for businesses that rely on machinery or equipment for their income streams. Understanding value in use allows assessors to evaluate personal property based not solely on what it could fetch on the market but rather on how effectively it can produce income in its current context. This is particularly relevant in various industries where machinery may depreciate in market value but continue to generate significant revenue, thereby enhancing its economic justification.