SecProbe.io

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      September 22, 2005

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

Re:	ACE*COMM Corporation
Amendment No. 2 to Registration Statement on Form S-3
	Filed September 2, 2005
	File No. 333-124351

	Form 10-K for the fiscal year ended 6/30/2005
	Filed August 31, 2005
	File No. 000-21059

Dear Mr. Delmar:

    We have reviewed your response letter dated September 2, 2005
and
have the following accounting comments on your financial
statements.
Legal comments may follow pending your response to our prior
comment
number 1 from the letter dated August 29, 2005.

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

Financial Statements

Notes to Consolidated Financial Statements

Note 2 - Summary of Significant Accounting Policies

Revenue Recognition, page F-7

1. Your disclosure indicates that you allocate revenue to each
element of multiple element arrangements based on internal price
listings.  In your response to comment number 9 in your letter
dated
June 10, 2005, you state that you have established objective
evidence
by separately selling each element.  Furthermore, we note your
disclosure on page 26 of your Critical Accounting Policies section
that vendor-specific objective evidence of fair value is generally
the price charged when the element is sold separately.  Tell us
the
basis for your disclosure that objective evidence is based on
internal price listings.

Note 3 - Accounts Receivable, page F-11

2. You indicate that two international customers have invoices
outstanding for greater than 90 days as of June 30, 2005 amounting
to
$964,000.  We note from disclosure throughout your filing that
international customers take longer to pay, international
customers
have negotiated longer payment terms, and certain customers have
experienced adverse changes in their financial condition.  Tell us
how you considered your past experience in determining whether the
fixed or determinable and collectible revenue recognition criteria
had been met for these two international contracts.  In addition,
explain to us how you considered the significant amount of
invoices
over 90 days and the overall increase in accounts receivable in
determining the amount of your allowance for doubtful accounts of
$89,000 as of June 30, 2005.

Note 10 - Stockholders` Equity, page F-15

3. You indicate on page F-17 that there were no warrants
outstanding
at June 30, 2005.  Tell us the basis for this statement
considering
that you disclose on page 25 that in conjunction with the
$2,500,000
private placement on March 31, 2005, you issued 500,000 warrants
to
purchase common stock at an exercise price of $3.53.  Also tell us
the basis for your accounting for these warrants as well as the
investors` additional investment right to acquire common stock and
warrants.  Explain how you considered the guidance in SFAS 133 and
EITF 00-19 in determining whether these financial instruments
should
be accounted for separately as derivatives.  In this regard, we
note
your obligation to register the underlying shares with the SEC.

You may contact Morgan Youngwood, Staff Accountant, at (202) 551-
3497, Melissa Walsh, Staff Accountant, at (202) 551-3224  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
September 22, 2005
page 1

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