The field modified by feature populates when a user changes the value of the configured column. This is for instance useful if you want to automatically capture the user who performed a particular action on a record
Creating a field modified by calculation only requires entering the type, and the table and column details in the first 2 sections. This example captures who made an approval decision on an equipment request record

This screenshot shows the field having been auto-populated for this example after entering and saving an approval decision
