This Test distinguishes between sediment and Sludge
Sediment is insoluble material Present in the oil.
Sludge is a polymerized degradation product of solid and liquid insulating material. Sludge is soluble in oil upto a certain limit, depending on the oil solubility characteristics and temperature.
The Presence of sediment and sludge may change the electrical properties of the oil and in addition, deposit may hinder heat-exchange, thus encouraging thermal degradation of the insulating materials.