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Proc-Type: 2001,MIC-CLEAR
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<SEC-DOCUMENT>0000000000-06-007413.txt : 20060929
<SEC-HEADER>0000000000-06-007413.hdr.sgml : 20060929
<ACCEPTANCE-DATETIME>20060210154750
<PRIVATE-TO-PUBLIC>
ACCESSION NUMBER:		0000000000-06-007413
CONFORMED SUBMISSION TYPE:	UPLOAD
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20060210

FILED FOR:		

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			ACE COMM CORP
		CENTRAL INDEX KEY:			0001017526
		STANDARD INDUSTRIAL CLASSIFICATION:	SERVICES-COMPUTER INTEGRATED SYSTEMS DESIGN [7373]
		IRS NUMBER:				521283030
		STATE OF INCORPORATION:			MD
		FISCAL YEAR END:			0630

	FILING VALUES:
		FORM TYPE:		UPLOAD

	BUSINESS ADDRESS:	
		STREET 1:		704 QUINCE ORCHARD RD
		CITY:			GAITHERBURG
		STATE:			MD
		ZIP:			20878
		BUSINESS PHONE:		3012589850

	MAIL ADDRESS:	
		STREET 1:		704 QUINCE ORCHARD ROAD
		CITY:			GAITHERSBERG
		STATE:			MD
		ZIP:			20878
</SEC-HEADER>
<DOCUMENT>
<TYPE>LETTER
<SEQUENCE>1
<FILENAME>filename1.txt
<TEXT>





      February 10, 2006


Steven R. Delmar
Chief Financial Officer
ACE*COMM Corporation
704 Quince Orchard Road
Gaithersburg, MD 20878

Re:	ACE*COMM Corporation
	Form 10-K for the fiscal year ended 6/30/2005
	Filed August 31, 2005
      Form 10-Q for the quarter ended 09/30/2005
      Filed November 14, 2005
	File No. 000-21059

Dear Mr. Delmar:

    We have reviewed your response letter dated February 6, 2006
and
have the following accounting comments on your financial
statements.


Form 10-K for the Fiscal Year Ended June 30, 2005

Financial Statements

Notes to Consolidated Financial Statements

Note 10 - Stockholders` Equity, page F-15

1. We note your response to prior comment number 1.  While we do
not
necessarily agree with the notion that something can be
quantitatively material but mitigated by qualitative factors to be
immaterial, we do not object based on the particular facts and
circumstances to the Company recognizing these warrants as equity
for
the interim periods ended March 31, 2005 and September 30, 2005
and
the fiscal year ended June 30, 2005.


Note 7 - Merger And Acquisitions, page 11

2. We note your response to prior comment number 4.  Clarify your
statement that the amendment related "primarily to the estimated
value of certain specific contracts existing on the date of
acquisition and changes in that estimated value post acquisition".
Explain why the estimated value has changed (i.e., original
assumptions were incorrect or events occurred subsequent to
acquisition that changed those assumptions).  In this regard,
demonstrate to us how you can clearly and directly link the
adjustments on an objective basis to the estimated fair value of
the
contracts post acquisition.  Indicate why the "post acquisition"
decline in value is not the result of an impairment subsequent to
acquisition that should be recorded in accordance with SFAS 144.
In
addition, tell us and clearly disclose how you will account for
the
earn-out.  See paragraph 51(f) of SFAS 141.



You may contact Morgan Youngwood, Staff Accountant, at (202) 551-
3497
or Stephen Krikorian, Accounting Branch Chief at (202) 551-3730 if
you have questions regarding comments on the financial statements
and
related matters.


							Sincerely,


							Stephen Krikorian
							Accounting Branch Chief
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Steven R. Delmar
ACE*COMM Corporation
February 10, 2006
page 1



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