Final answer:
The special principle in accounting problems with interest capitalization is to add interest expenses to the cost of an asset instead of immediately expensing them, allowing for a more accurate matching of expenses with revenue over the asset's useful life.
Step-by-step explanation:
In accounting problems involving interest capitalization, there is a special principle called the interest capitalization principle. This principle states that interest expenses incurred during the construction or acquisition of an asset can be added to the cost of the asset rather than being immediately expensed.
By capitalizing the interest, the total cost of the asset is increased, which in turn affects the depreciation expense in future periods. The interest capitalization principle allows for a more accurate matching of expenses with the revenue generated by the asset over its useful life.
For example, if a company borrows money to construct a building, the interest incurred on the borrowing can be added to the cost of the building. This ensures that the interest expense is spread out over the useful life of the building and is matched with the revenue generated by the building.