The kind-of-activity unit (KAU) is a part of an enterprise which groups together all the input factors which contribute to the performance of a specific economic activity.
For example, a kind-of-activity unit might be the combination of all parts of a metal producing enterprise that produce copper. Within the same enterprise there might be another KAU producing aluminium. Before statistically subdividing enterprises into KAUs it is necessary to make sure that the enterprise is capable of indicating or calculating for each KAU at least the value of production, intermediate consumption, manpower costs, the operating surplus, employment and gross fixed capital formation.
The purpose of the KAU is to improve the homogeneity of statistical surveys by branch of activity or product. In the above example, without the use of KAUs, it would be necessary to classify the enterprise either as a copper manufacturer or as an aluminium manufacturer. And thus rather diverse enterprises might be considered to engage in the same economic activity which would make statistical results less clear and comparable.
The economic activity is defined at class level (four digits) of the European classification of economic activities (NACE Rev. 2).