.14 Recognition of interest revenue and expense is essential in determining the
profitability of a bank. A bank’s main activity is accumulating interest-bearing funds
and investing them in productive assets. As in any other industry, in the banking
industry there is a possibility that the timing of revenue recognition differs from that of
expense recognition. This makes the matching of cost against revenue in banking not
easy to achieve, and therefore, the characteristics of the bank’s business activities
should be taken into consideration.