Dear Pradeep
I have created all objects as functional location till last level. Only we have used equipment for the objects which are movable in nature & recyclable after repair. In this case also you can create FL hierarchy with structuring as below
POWER GENERATOR - (say level1)
POWER GEN 2600kVA (2nd level)
ALTERNATOR (3rd level)
CTRL/ANN PANEL
COOLING SYSTEM
You have option to create either equipment heirarchy under a particular FL or you can have FL heirarchy also.