SecProbe.io

December 27, 2013

Via U.S. Mail
Edward R. Cameron
President and Chief Executive Officer
Appliance Recycling Centers of America, Inc.
7400 Excelsior Boulevard
Minneapolis, Minnesota 55426 -4517

Re: Appliance Recycling Centers of America, Inc.
 Form 10-K for Fiscal Year Ended December 29, 2012
Filed March 22, 2013
Form 10 -Q for F iscal Quarter Ended September 28, 2013
Filed November 7, 2013
File No. 0 -19621

Dear Mr. Cameron :

We have reviewed your filing s and have the following comments.  We have limited our
review to only your financial statements and related disclosures and do not intend to expand our
review to ot her portions of your documents.  In some of our comments, we ma y ask you to
provide us with information so we may better understand your disclosure.

Please respond to this letter within ten business days by amending your filing s, by
providing the requested information, or by advising us when you will provide the requ ested
response.   If you do not believe our comments apply to your facts and circumstances or do not
believe an amendment is appropriate, please tell us why in your response.

After reviewing any amendment to your filing s and the information you provide i n
response to these  comments, we may have  additional comments.

Form 10 -K for Fiscal Year Ended December 29, 2012

Note 1. Nature of Business and Basis of Presentation, page 36

1. Please refer to ASC 810 -10-15-14 and tell us the factors consider ed in determining that
the AAP joint venture is a variable interest entity (VIE).  Additionally, we note your
disclosure that AAP is consolidated in your financial statements based on your ability to
significantly influence the economic performance of the entity through your contractual
agreement with GE.  Please explain to us in detail with a view toward summary
disclosure whether your variable interests in AAP provide you a controlling financial
interest in AAP, which is the condition precedent to being t he primary beneficiary and
consolidator of the VIE.  Refer to ASC 810 -10-25-38 and 38A for guidance.

Edward R. Cameron
Appliance Recycling Centers of America, Inc.
December 27, 2013
Page 2

 Additionally, please tell us your consideration of disclosing your methodology for
determining that you are the primary beneficiary of the VIE, including,  but not limited to,
significant judgments and assumptions made.   As suggested in ASC 810 -10-50-12, one
way to meet this disclosure requirement would be to provide information about the types
of involvements you consider significant, supplemented with inf ormation about how the
significant involvements were considered in determining that you are the primary
beneficiary.

Note 2. Significant Accounting Policies, page 37

2. Please tell us your consideration of disclosing the types of expenses you include in co st
of revenues and the types of expenses you include in selling, general and administrative
expenses, including disclosure of the types of expenses included in the cost of processed
metals from recycled appliances.  As it relates to cost of retail revenues , please tell us
your consideration of disclosing specifically whether you include inbound freight
charges, purchasing and receiving costs, inspection costs, warehousing costs, internal
transfer costs and the other costs of your distribution network in cos t of retail revenues.

Revenue Recognition, page 39

3. Please disclose your revenue recognition policy for appliance replacement programs
where you recycle and replace old appliances with new energy efficient appliances.
Please specify the timing of reven ue recognition; e.g., at the time of collection of the old
appliance and replacement with the new appliance or upon completion of the recycling of
the old unit.  Tell us whether the appliance replacement programs represent multiple
element arrangements con taining more than one unit of accounting pursuant to ASC 605 -
25 and how you arrived at your conclusion.  If these programs have more than one unit of
accounting, tell us and disclose how the overall arrangement consideration is measured
and allocated to th e separate units of accounting in the arrangement.

4. Please explain to us the process by which you receive revenue for producing carbon
offsets .  Please explain to us the exact point in the process in which you record revenue.

5. We note your disclosure of accrued rebate and incentive checks on page 42.  Please tell
us your consideration of disclosing: the nature of the rebate and incentive programs
offered to customers; your accounting policy for each of these programs, including the
Statements of Comprehensive Income line item in which the cost of these programs is
included; and the timing of recognition of the rebates and incentives.  If the rebates and
incentives are treated as expenses rather than a reduction of revenues, pleas e tell us the
basis for such classification.  Please refer to ASC 605 -50-45.

Edward R. Cameron
Appliance Recycling Centers of America, Inc.
December 27, 2013
Page 3

 Signatures, page 57

6. Please refer to the Signature Page and General Instruction D to Form 10 -K and provide
conforming signatures in future filings.  In this regard, please note the report should be
signed on behalf of the registrant by your principal executive officer, princip al financial
officer, controller or principal accounting officer and at least a majority of the board of
directors.  Any person who occupies more than one of the specified positions shall
indicate each capacity in which he signs the report.

Form 10 -Q for Fiscal Quarter Ended September 28, 2013

Note 10. Income Taxes, page 12

7. Please reconcile for us your effective tax rate of 15% for the nine month period ended
September 28, 2013 to your federal statutory tax rate.  Please also refer to ASC 740 -270-
50-1 and tell us your consideration of disclosing in your interim financial statements the
reasons for significant variations in the customary relationship between income tax
expense and pretax income.

Note 12. Segment Information, page 14

8. Please explain to  us and tell us your consideration of discussing in Management’s
Discussion and Analysis of Financial Condition and Results of Operations the significant
increase in unallocated corporate costs during the three and nine months ended
September 28, 2013 as c ompared to the three and nine months ended September 29,
2012.

We urge all persons who are responsible for the accuracy and adequacy of the disclosure
in the filing s to be certain that the filing s include the information the Securities Exchange Act of
1934 and all applicable Exchange Act rules require.   Since the company and its management are
in possession of all facts relating to a company’s disclosure, they are responsible for the accuracy
and adequacy of the disclosures they have made.

 In respondi ng to our comments, please provide  a written statement from the company
acknowledging that:

 the company is responsible for the adequacy and accuracy of the disclosure in the filing s;

 staff comments or changes to disclosure in response to staff comments do not foreclose
the Commission from taking any action with respect to the filing s; and

 the company may not assert staff comments as a defense in any proceeding initiated by
the Commission or any person under the federal securities laws of the United Stat es.

Edward R. Cameron
Appliance Recycling Centers of America, Inc.
December 27, 2013
Page 4

You may contact Robyn Manuel, Staff Accountant,  at (202) 551 -3823  or me at (202)
551-3849  if you have questions regarding our comments or any other questions.

Sincerely,

 /s/ James Allegretto

James Allegretto
Senior Assistant Chief Accountant