I'm not good with Partnerships, but I'll take a stab at it ...

Why does it matter?  Did the client even look at it?

Capital accounts are basically from the Partnership point of view, not the Individual point of view, and do not directly affect the 1040.  If the taxpayer wants to know why the value went down, they should ask the Partnership.

If that number is the "theoretical liquidating value", it just means the value of his investment went down.  Just like stock, values could go up or down but don't really matter until it actually is sold (or in this case, liquidated).