Which concept relates to the effectiveness of an asset based on its usage?

The concept that relates to the effectiveness of an asset based on its usage is value-in-use. This term refers to the value derived from the actual utility that an asset provides to its owner or user. It considers how an asset contributes to generating cash flow or other benefits over time, emphasizing the practical application of the asset in its operational context.

Value-in-use is particularly important because it takes into account the conditions under which the asset is used and the specific benefits it delivers, rather than its cost or potential market value alone. This concept recognizes that an asset can have significant worth based on how it is employed, making it crucial for accurately assessing personal property in various situations.

In contrast, historical cost relates to the original purchase price of an asset and doesn't take into account how effectively it’s utilized. Value in exchange, on the other hand, looks at the value of the asset in a market transaction, which may not reflect how well the asset serves its purpose in practice. Lastly, market price generally refers to the current price that an asset can command in the marketplace, independent of its actual usage or efficiency.