PART 3 NOTES – KIRKBI GROUP
SECTION 2 – OPERATING PROFIT FROM LEGO
BRAND GROUP ACTIVITIES
2.1. DEFINITION OF LEGO BRAND GROUP ACTIVITIES
LEGO Brand Group activities are defined as activities
around the LEGO® brand, which inlude ownership of
the LEGO Group, trademark royalties and ownership
(m DKK) 2017 2016
Sale of play materials 34,383 37,379
License income 612 555
Trademark royalties 1,346 1,437
Total revenue from LEGO Brand Group activities 36,341 39,371
Sale of goods and services 397 82
Revenue from Renewables 770 261
Rental income 502 372
Other revenue 12 24
Total revenue for the KIRKBI Group 38,022 40,110
| 52 | ANNUAL REPORT 2017
of and assets leased to Merlin Entertainments plc
as owners of the LEGOLAND® parks and LEGOLAND
Sales represent the fair value of the sale of goods
or services excluding VAT and after deduction of
provisions for returned products, rebates and trade
discounts relating to the sale.
Provisions and accruals for rebates to customers
are made in the period in which the related sales
are recorded. Historical data are readily available
and reliable and are used for estimating the
amount of the reduction in sales.
Revenue from the sale of goods or sevices are
recognised when all the following specific conditions
have been met and the control over the
goods has been transferred to the buyer.
• Significant risks and rewards of ownership of the
goods have been transferred to the buyer
• Revenue can be measured reliably
• It is probable that the economic benefits associated
with the transaction will flow to the KIRKBI Group.
• Costs incurred or to be incurred in respect of
the transaction can be measured reliably.
These conditions are usually met by the time the
products are delivered to the customers.
Licence fees are recognised on an accruals basis
in accordance with the relevant agreements.
Revenue is measured at the fair value of the
consideration received or receivable.
Revenue from rents is accrued to the financial year
Net profit before tax from LEGO A/S, a company
in which the KIRKBI Group has significant
influence, is fully consolidated into the Operating
profit from the LEGO Group.
Merlin Entertainments plc, in which KIRKBI
owns 29.7 %, is accounted for using the equity
method. Changes to the carrying amount of the
investment are charged into operating profit from
Merlin activities. Assets owned by the KIRKBI Group
and leased to Merlin Entertainments plc are
included in operating profit from Merlin activities.