Principal, secondary and ancillary activities

3.10 Definition:

The principal activity of a local KAU is the activity whose value added exceeds that of any other activity carried out within the same unit. The classification of the principal activity is determined by reference to NACE rev. 1, first at the highest level of the classification and then at more detailed levels.

3.11 Definition:

A secondary activity is an activity carried out within a single local KAU in addition to the principal activity. The output of the secondary activity is a secondary product.

3.12 Definition:

The output of an ancillary activity is not intended for use outside the enterprise. An ancillary activity is a supporting activity undertaken within an enterprise in order to create the conditions within which the principal or secondary activities of local KAUs can be carried out. Ancillary activities typically produce outputs that are commonly found as inputs into almost any kind of productive activity, small as well as large.

Ancillary activities may be, e.g. purchasing, sales, marketing, accounting, data processing, transportation, storage, maintenance, cleaning and security services. Enterprises may have a choice between engaging in ancillary activities or purchasing such services on the market from specialist service producers.

Own-account capital formation is not considered to be an ancillary activity.

3.13 Ancillary activities are treated as integral parts of the principal or secondary activities with which they are associated. As a result:

1. the output of an ancillary activity is not explicitly recognised and recorded separately. It follows that the use of this output is also not recorded;
2. all the inputs consumed by an ancillary activity – materials, labour, consumption of fixed capital, etc. are treated as inputs into the principal or secondary activity which it supports.