An important concern of accounting policy is the provision of guidance for the reporting of relevant information related to economic events including public policy actions. In the case of motor carrier deregulation, the Financial Accounting Standards Board issued a specialized accounting standard which required all regulated motor carriers to write off as extraordinary losses the intangible assets associated with their interstate operating rights. The specific focus of the present research was to investigate the extent to which these reported accounting losses reflect real economic losses. The findings provide evidence that industry‐wide economic losses are unsubstantiated. The study concludes that a requirement that all firms involved in a regulatory reform to report write‐offs which are unsupported by entity‐specific transactions or events can result in serious economic consequences. Also discussed are the more general issues relevant to the promulgation of specialized accounting standards, the impact of accounting policy on public policy formulations, and accounting treatments for politically sensitive i