SecProbe.io

<DOCUMENT>
<TYPE>CORRESP
<SEQUENCE>1
<FILENAME>filename1.txt
<TEXT>
                Vedder, Price, Kaufman & Kammaholz, P.C.
                            805 Third Avenue
                       New York, New York 10022
                            STEVEN R. BERGER
                              212-407-7714
                         sberger@vedderprice.com

                                                July 15, 2005

U.S. Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C.  20549

Attention:  Larry Spirgel, Assistant Director
            O. Nicole Holden, Staff Accountant

Re:     Touchstone Applied Science Associates, Inc.
        File No. 001-16689
        -------------------------------------------

Ladies and Gentlemen:

      On behalf of Touchstone Applied Science Associates, Inc. (the
"Company"), I am hereby providing the following supplement to our
previous letters, dated May 2, 2005 and June 24, 2005, and to our
conference call on July 6, 2005.  As we agreed, the Company is
filing this response, and upon your review and approval, the
Company will then file amended and restated periodic reports for
the fiscal periods ended subsequent to July 2003, including the
quarterly period for the fiscal quarter ended April 30, 2005.

      1.    The Company notes that each of the amended and restated
periodic reports filed on June 13, 2005 includes, in several
places, an explanatory paragraph indicating that the financial
statements included in such reports have been amended and
restated, and a footnote to the financial statements setting forth
in detail the impact of such restatement on the financial
statements for such period.  However, as requested by the Staff in
our conference call, when the Company files amended and restated
reports pursuant to this letter, the Company will include the
caption, "As Restated" on each of the financial statements
included in such reports.

      2.    The Company will amend the Certifications included as
Exhibits 31 and 32 to each of its periodic reports to comply with
the comments contained in the SEC's letter, dated April 12, 2005,
specifically referring to (a) an evaluation of disclosure controls
and procedures as of the end of the fiscal period covered by the
respective report; and (b) that there were no changes in the
Company's internal controls during such period that could
materially affect the Company's internal controls during such
fiscal period.

      3.     The SEC has requested that the Company modify the
following statement included in its "Critical Accounting Policies"
disclosure:

      "Revenues from the Company's sales of its proprietary
tests and other assessment related products are recognized
when product is shipped from the Company's warehouse.
Assessment consulting revenues are recognized when the
consulting services are rendered."

The Company will amend such disclosure in the "Management's
Discussion & Analysis or Plan of Operation" and in the appropriate
footnote to its financial statements contained in each such
periodic report as follows:

      "Revenues from the Company's sales of its proprietary
tests, including sales of the related ancillary materials,
are recognized when the Company ships the physical product
from its warehouse.  The Company's revenues from performance
of assessment consulting and psychometric services under
long-term contracts are recognized on the percentage-of-
completion basis pursuant to the provisions of Statement of
Position No. 81-1, "Accounting for Performance of
Construction-Type and Certain Production-Type Contacts" and
Accounting Research Bulletin No. 45, "Long-Term Construction-
Type Contacts".  For each contract, the Company compares the
costs incurred in the course of performing such contract
during a fiscal period to the total estimated costs of full
performance of the contract, and recognizes a proportionate
amount of revenue for such period."

      The Company believes that the accounting policies described
above are in conformity with SOP 81-1 and United States generally
accepted accounting principles ("GAAP") for the following reasons:

      *     The Company's contracts for the performance of custom
            consulting and psychometric services are either fixed-
            price contracts or cost-plus contracts.  In both cases,
            the Company uses the percentage-of-completion method to
            recognize revenue.  As provided in SOP 81-1, the
            percentage-of-completion method is appropriate in
            circumstances in which the timely performance of a
            contract is essentially a continuous sale of the
            contracting party's goods and services.  Furthermore,
            percentage-of-completion is preferred where the
            contracting party is able to make reasonably dependable
            estimates of costs, progress towards completion and
            contract revenues.  In these circumstances, the parties
            have specified in the contract the enforceable rights
            regarding the services and work-in-progress, and both
            parties can be expected to perform their respective
            contractual obligations. (SOP 81-1, paragraphs 22-24)

      *     In a fixed price contract, the Company and its client
            agree on the tasks comprising complete performance, the
            revenues for the services to be performed, and the
            deadlines by which the services must be performed.  The
            contracts sometimes contain a separate schedule showing
            invoicing dates.  The contracts generally provide that
            the completed work, as well as the work-in-progress,
            become the property of the purchaser of the Company's
            services.  At the measurement dates at the end of a
            reporting period, the Company compares the costs
            incurred to the estimated costs of completion and
            recognizes for such period a proportionate amount of the
            revenue to be earned under such contract.  (SOP 81-1,
            paragraphs 50, 80).  The Company utilizes the
            percentage-of-completion method of accounting for
            contract revenues as it believes that such method
            accurately represents the terms of the contracts and the
            progress toward completion, as well as the economic
            realities of this portion of the Company's business.

      *     In a cost-plus contract, the Company and its client
            agree that at specified calendar dates, the Company can
            invoice the client for services performed in an
            aggregate amount equal to the costs incurred by the
            Company in providing such services during the period
            plus a specified gross margin percentage over such
            costs.  The percentage-of-completion method is also
            appropriate to account for cost-plus contracts because
            the "plus" part of the contract price represents the
            Company's gross profit margin and the recognition of
            such profit is appropriately tied to the performance of
            the corresponding services.  Currently, the Company has
            a contract with a state to perform certain item
            development and psychometric services that relate to
            special education students.  The contract provides for
            billing based upon "cost-plus" and an agreed-upon
            indirect charge (which includes overhead and profit).
            At the outset of the contract, the Company prepares a
            detailed estimate of the services to be performed and
            the estimated total costs associated with contract
            completion.  This estimate is updated monthly based upon
            costs incurred to date, and an estimate of the remaining
            costs to complete the contract.  The Company then
            measures its progress toward completion of the contract
            based upon total costs incurred, and records revenue
            proportionately based upon the costs incurred as of the
            end of the measurement period as they relate to the
            aggregate of incurred costs and estimated costs to
            complete. (SOP 81-1, paragraph 57)

      *     To the extent that there are any changes to a contract
            during the course of performance of such contract, the
            Company will revise its estimate of total costs of full
            performance and adjust accordingly the current and
            prospective application of the percentage-of-completion
            accounting for such contract.

      4.    With respect to its sale of proprietary tests and
ancillary testing materials and the performance of scoring
services, the Company follows the guidance of SAB 104 ("Revenue
Recognition", December 2003).  Accordingly, the Company recognizes
revenue on its products when the revenues have been realized or
become realizable and have been earned.  For these services and
products, title passes to the customer and revenue is recognized
as follows:

            (a) Proprietary tests and related testing materials--
when the tests and testing materials shipped; the customer has
title to the physical testing materials, but the content of the
tests remains the intellectual property of the Company; and

            (b) Scoring reports--in accordance with the scoring
contract, but generally when the scoring services are completed
and the scoring reports distributed to the contracting school or
school district.

                               *   *   *

      The Company believes that its method of accounting for its
contracts has been, and continues to be, in conformity with GAAP,
consistently applied.  If the Staff concurs with the Company's
discussion contained in this letter, the Company will proceed to
amend and restate its periodic reports for the fiscal periods
ended subsequent to July 2003 in order to include the additional
textual disclosure referred to above.

      If you have additional questions or would like further
information, please do not hesitate to contact Andrew Simon,
President of the Company at (845) 277-8100, or the undersigned, at
(212) 407-7714.  Thank you very much.

                                                Very truly yours,

                                                /s/STEVEN R. BERGER
                                                -------------------
                                                Steven R. Berger

cc:  Andrew L. Simon, President
     Touchstone Applied Science Associates, Inc.

</TEXT>
</DOCUMENT>