Your manager emails you and says:

Thanks for your input regarding estimating the value of the various asset classes. I have been examining the goodwill balance of one of the companies in my value index portfolio and I noticed that as the creditworthiness of the company improved the earnings of the company decreased and asset values decreased due to fair value accounting and changes in goodwill. I dont understand how this would happen. Write a response to the portfolio manager discussing the relationship between fair value accounting and changes in goodwill and asset values and corporate earnings.