How do you explain Asset vs Equipment vs Material in SAP workshops?

Most clients get confused.
Because in business language, “machine = machine.”
But in SAP, it could mean three different things.

⸻

🔹 Asset (FI-AA)
 • A financial object.
 • Used for depreciation, capitalization, and reporting.
 • Example: “This CNC machine costs ₹50 lakhs. It sits on our balance sheet.”

🔹 Equipment (PM)
 • A technical object.
 • Tracks breakdowns, preventive maintenance, costs, and history.
 • Example: “This CNC machine had 3 breakdowns last year, here’s the record.”

🔹 Material (MM)
 • A logistics object.
 • Used for procurement, inventory, and consumption.
 • Example: “We bought 5 spare CNC motors and stored them in warehouse.”

⸻

💡 Simple rule to tell clients:
 • If Finance wants it → Asset
 • If Maintenance wants it → Equipment
 • If Stores wants it → Material

And yes, the same physical machine can exist in all three layers at once. 


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