It’s bugged me for a while, but only recently bugged me enough for me to try to find out what it does. I’m talking about the Classify as tangible product parameter that you can set on categories in a sales or procurement category:

What little documentation I can find for it is, I now believe, misleading. Perhaps more amazing is that there is nothing written about this parameter in any place that I can get Google (or Bing) to find. What follows is a description of the functionality that I think is linked to this parameter. As I am not lucky enough to have access to Visual Studio, it’s based on what I could find with a trawl through an AX 2012 R3 AOT. Perhaps I missed something (likely), and perhaps something has changed in F&O, but this has to be better than nothing. As far as I can tell, this parameter affects only interactions with Sales orders and Purchase orders. I assume we are all familiar with how we can create Return (sales) orders, and how we can use Registration and Pick on order lines for normal Items. You may never have tried to do those things for an order line which is for a Category, but if you did, you might find that you can’t add a Category to a Return order:

and you would see that the Update line -> Pick and Registration options are unavailable:

However, if the Category has Classify as tangible product set, then you are able to perform Pick and Registration, and add the Category to a Return sales order line. Here I am performing Registration for the Category Cars (in the Contoso dataset):

The Contoso dataset has no Sales category which is Classified as a tangible product, but I have set the Television category so, and find I am able to add it to a Return order line:

This, I believe, is the full extent of the functionality linked to the Classify as tangible product parameter. If you know different, please let me know.