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SEC Response Letter

May 25, 2007

VIA EDGAR

Mr. Daniel L. Gordon

Branch Chief

Division of Corporation Finance

United States Securities and Exchange Commission

Mail Stop 4561

450 Fifth Street, N.W.

Washington, D.C. 20549

Dear Mr. Gordon:

    Re:

    Ritchie Bros. Auctioneers Incorporated

Form 40-F for the year ended December 31, 2006

Filed 2/22/07

File No. 001-13425

This letter is written in response to the comments included in your letter dated May 11, 2007
regarding your review of our Form 40-F filing referenced above. We have included your original
comments in bold text below for your convenience. References in this letter to “we,” “our” or “us”
are to Ritchie Bros. Auctioneers Incorporated and its subsidiaries.

We also acknowledge that:

    •

    we are responsible for the adequacy and accuracy of the
disclosure in our SEC filings;

    •

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

    •

    we 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 States.

    1.

    Please advise us how you determined that you meet the eligibility requirements to file on
Form 40-F. Refer to paragraph A(2) of the general instructions to Form 40-F. Specifically,
tell us how you meet the requirements to qualify as a foreign private issuer.

Mr. Daniel L. Gordon

May 25, 2007

Page 2 of 8

    In accordance with Rule 405 of the Securities Act, the term “foreign private issuer” means any
foreign issuer other than a foreign government except an issuer meeting the following
conditions:

    1)

    More than 50 percent of the outstanding voting securities of such issuer are directly or
indirectly owned of record by residents of the United States; and

    2)

    Any of the following:

    i)

    The majority of the executive officers or directors are United States
citizens or residents;

    ii)

    More than 50 percent of the assets of the issuer are located in the United
States; or

    iii)

    The business of the issuer is administered principally in the United States.

    We are a “foreign issuer” for purposes of SEC rules because we are a company amalgamated under
and governed by the Canada Business Corporations Act. In determining whether we are a foreign
private issuer, we performed an inquiry with our transfer agent, Computershare Trust Company of
Canada, of the number of our outstanding common shares owned of record by residents of the
United States, including brokers, dealers, banks and other nominees located in the United
States in accordance with Rule 405. As at December 31, 2006, approximately 44% of our
outstanding common shares were held by shareholders of record resident in the United States.

    To determine beneficial ownership of shares held of record by (a) non-U.S. shareholders, and
(b) U.S. shareholders, we reviewed our shareholder position listing report and holders of
record report. We also reviewed all omnibus proxies received for our annual meeting of
shareholders and our Non-Objecting Beneficial Ownership (or NOBO) report. These reports and
sources do not provide identity information for all of our beneficial owners because most have
indicated an unwillingness to provide relevant information and accordingly, were not included
on our NOBO list. However, based on the information available to us, there appear to be more shares held by United States holders of record that are beneficially owned by non-U.S. persons
than shares held by non-U.S. holders of record that are beneficially owned by U.S. persons.
For example, the majority of shares reflected in our NOBO list were beneficially owned by
non-U.S. persons.

    Based on the beneficial ownership reports we have been able to obtain, we have concluded that
the actual percentage of shares beneficially owned by U.S. residents is likely less than the
44% record ownership by U.S. residents. Accordingly, we have also concluded that the
percentage of our shares beneficially owned by U.S. residents is less than 50%, and that we
therefore qualify as a foreign private issuer and that filing on Form 40-F was appropriate.

Mr. Daniel L. Gordon

May 25, 2007

Page 3 of 8

    We will continue to monitor on a quarterly basis the percentage of our outstanding voting
securities directly or indirectly owned of record by residents of the United States, and apply
the second part of the test when necessary, to determine if the use of Form 40-F continues to
be appropriate.

    2.

    We note that you discuss gross auction sales within Management’s Discussion and Analysis and
various other parts of the filing. This disclosure represents a non-GAAP financial measure
and it appears that your presentation of gross auction sales is not appropriate. Such
measures need to be accompanied by clear disclosure that the measures do not have a
standardized meaning, an explanation of their composition and reconciliation to the most
directly comparable measure in the issuer’s GAAP financial statements. In your response
provide us with your proposed disclosure that will be included in future filings. For
reference see Revised CSA Staff Notice 52-306.

    Within our Management’s Discussion and Analysis and various other parts of our filing, when we
refer to gross auction sales for the first time we state that it represents the total proceeds
from all items sold at our auctions. We believe that this term is clearly defined and not
subject to significant non-standard treatment such as, for example, EBITDA or EBIT. In our
MD&A discussion under the heading Sources of Revenue and Revenue Recognition, we provide an
explanation that gross auction sales is an important measure we use in comparing and assessing
our operating performance and why we feel it is important. We also state that gross auction
sales is not a measure of revenue and is not presented in our statement of operations, and
provide the closest comparable financial statement measure, which is auction revenues (the top
line of our Statement of Operations). As discussed in our public disclosure, auction revenues
may vary from period to period based on the types of commissions and agency structures we
undertake. Because gross auction sales are not affected by the types of commissions and agency
structures we undertake, we believe that they provide a more useful and consistent measure of
our operational performance from period to period, which also assists in better understanding
other aspects of our business and performance. Throughout our filing, we give equal or greater
prominence to auction revenues than to gross auction sales.

    We believe gross auction sales is not a financial or liquidity measure derived from our
financial statements. As such, we believe that the otherwise applicable reconciliation
requirement of Regulation G is not required.

    The following is our proposed general disclosure of gross auction sales to be included in
future filings:

    Gross auction sales represents the total proceeds from all items sold at our auctions. Our
definition of gross auction sales may differ from those used by other participants in our
industry. Gross auction sales is an important measure we use in comparing and assessing
our operating performance. It is not a measure of

Mr. Daniel L. Gordon

May 25, 2007

Page 4 of 8

    our financial performance, liquidity or revenue and is not presented in our consolidated
financial statements. We believe that auction revenues, which is the most directly
comparable measure in our Statement of Operations, and certain other line items, are best
understood by considering their relationship to gross auction sales. Auction revenues
represent the revenues we earn in the course of conducting our auctions. The portion of
our gross auction sales that we do not retain is remitted to our customers who consign
items to our auctions.

    3.

    In future filings please revise to present incidental interest income within the Other income
(expense) section of your Statement of Operations.

    For all reporting periods commencing on or after January 1, 2008, we will present incidental
interest income within the Other Income (Expense) section of our Statement of Operations.

    4.

    Please advise us why you have characterized a decrease in funds committed for debt repayment
as a financing cash inflow. In your response, tell us if these funds were legally restricted
or just internally earmarked for debt service.

    In the past, certain of our term loans required us to make minimum annual payments (plus
interest) and to deposit a portion of those payments in a money market account with the lender,
which amount was treated as a sinking fund. The remainder of the annual payment was treated as
a principal repayment. Because the terms of the loan agreements required us to maintain these
minimum sinking fund balances for the duration of the term loans, the sinking funds were
contractually restricted. We recorded the sinking fund amounts in our consolidated balance
sheets as “funds committed for debt repayment”, and when we made sinking fund payments, we
treated the cash outflow as a financing cash outflow to reflect the fact that the payments were
made in accordance with specific loan agreements.

    When the term loans came due in 2004 and 2005, the related sinking fund balances were
available, at our election, to repay part of the remaining principal amounts outstanding on the
term loans or to be returned to our operating bank account. We elected to have the cash
returned to our operating account and to refinance the remaining balance of the term loans.
The money market funds were redeemed and the proceeds deposited in our bank account. As a
result, we treated the sinking fund portion of the transaction as a financing cash inflow to
reflect the fact that the sinking fund payments were now available for general purposes and
reclassified to cash and cash equivalents in our consolidated balance sheets. The repayment of
the term loans and subsequent refinancing of the loans was treated as a financing cash outflow
and cash inflow, respectively.

Mr. Daniel L. Gordon

May 25, 2007

Page 5 of 8

    5.

    Please advise us of your basis in GAAP for recording the net gain or loss on auction of
inventory items as revenue. It appears that you take ownership of some inventory and may have
all of the risk related to their future sale. Tell us why you are recording these revenues on
a net basis and not gross basis. For reference see EITF 99-19. We are referencing US GAAP
due to the fact that there is no reconciling item shown in footnote 9.

    Because the auction business is a net business, we do not record gross auction sales in our
Statements of Operations; rather, we record the net commission we earn from sales as auction
revenues, which reflects our acting in an agency relationship between buyers and sellers of
equipment. In certain limited situations, we temporarily acquire title to a limited number of
items of equipment to be sold at an upcoming auction, without assuming significant risks and
rewards of ownership of the goods. Our acquisition of equipment in advance of an auction is an
ancillary component of our auction business (typically representing less than ten percent of
gross auction sales volume) and we do not treat it as a separate and distinct business. We are
usually indifferent to the choice by a consignor of a commission-based or purchase contract.

    We acquire title to equipment to accommodate the desire of some sellers for greater
predictability of sale proceeds. As we do not acquire the equipment for speculative purposes,
but simply use the inventory option as a tool for securing equipment for a particular auction,
inventory items are typically held for less than 45 days and are sold on an unreserved basis at
the next local auction.

    We present these transactions involving equipment to which we have obtained title on a net
basis, with the net gain or loss on sale being recorded as a component of our auction revenues.
As discussed below, we believe our method of and reasons for acquiring equipment into
inventory provide persuasive evidence that net basis presentation is appropriate for us.

    We reached the decision to record a net gain or loss on auction of inventory items as revenue
after careful consideration of EITF 99-19. We evaluated the criteria detailed in EITF 99-19 as
follows:

    •

    Is the Company the Primary Obligor in the Arrangement? Our role as the primary
obligor in the arrangement is limited. We purchase items from equipment owners for sale
in a specific auction, but we are not responsible to buyers for the acceptability of the
equipment. The items are sold at the next auction on an “as-is, where-is” basis, and no
rights of return or warranties are provided to buyers. Our contracts for the acquisition
of equipment clearly state that the equipment is being acquired for resale at a specific
auction. We do not make any representations about the inventory items during marketing or
in the terms of sale, and buyers at our auctions sign an agreement acknowledging that we
make no representations as to suitability, acceptability or condition of items sold at our
auctions. In addition, the seller is responsible for delivering the items to our

Mr. Daniel L. Gordon

May 25, 2007

Page 6 of 8

    auction site prior to title transfer and the buyer is responsible for taking them away once
they are paid for in full.

    Consistent with our external reporting, our internal management reports show our revenue
from the sale of equipment at our auctions as a percentage of the sales price at auction,
regardless of whether we sell the equipment on a straight commission basis or purchase it
from the seller. This is illustrative of our view that our role is that of an agent of the
consignor or owner of equipment, and not that of principal. In certain situations we
will agree to pay to the seller an additional percentage of the proceeds from auction over
a certain threshold, which provides further evidence of the agency relationship and that we
are not the primary obligor in these transactions, which supports net presentation.

    •

    Does the Company have General Inventory Risk? We have negligible general
inventory risk as (a) we generally hold title to assets for a short period of time prior
to a specific auction, (b) the equipment we purchase generally is income-producing, and
not subject to significant fluctuations in value, and we are aware of prevailing market
prices, and (c) customers do not order items from us. Most inventory items are sold at
the next auction within days of title transfer in the same manner as
consigned equipment and we do not hold inventory from one
auction to the next. Equipment is typically taken into inventory only in connection with
a specific auction and there is no difference in the terms and
conditions of sale compared to consigned equipment. We do not acquire the inventory items for company use and ordinarily
do not sell the equipment any other way except at our unreserved auctions, where 100
percent of items sell on sale day to the highest bidder. In addition, we do not have any
back-end inventory risk because customers do not have the right of return.

    •

    Does the Company have Latitude in Establishing Price? We have no latitude in
establishing sale prices of inventory items. Similar to all other items sold at our
auctions, purchased inventory is sold on an “unreserved” basis. This means there are no
minimum or reserve prices on anything we sell at our auctions — every item is sold to the
highest bidder on sale day regardless of price. We provide a market place for the
exchange of assets, but the sales prices are determined by the bidders at our auction