Morse
& Morse, PLLC
1400
Old Country Road, Suite 302
Westbury,
NY 11590
Tel:
516-487-1446
Fax:
516-487-1452
Email:
morgold@aol.com
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October
24, 2007
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Paul
Fischer, Staff Attorney Division of Corporation
Finance
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Telephone
Number: 202-551-3415
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Facsimile
Number. 202-7729205
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Mail
Stop 3720
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Re:
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Anchor
Funding Services, Inc.
Registration
Statement on Form 10-SB/A
Quarterly
Report on Form 10Q-SB for the period ended June 30, 2007
File
No. 0-52589
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Dear
Mr. Fischer:
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We
have today electronically filed
Amendment No. 3 to the Form 10-SB/A and an Amendment to the Form 10-QSB for
the
period ended June 30, 2007. These filings respond to the Staff’s recent comment
letters. As for the Staff’s comment letter dated October 1, 2007, the Revenue
Recognition section of the financial statements and Management’s Discussion And
Analysis And Results of Financial Condition have each been revised to answer
your two open comments and to provide the information requested. In this
respect, the revenue recognition section, included under Summary of Significant
Accounting Policies has been revised to read as follows:
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2.
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SUMMARY
OF SIGNIFICANT ACCOUNTING
POLICIES:
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Estimates
– The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of
America
requires management to make estimates that affect the reported amounts
of
assets and liabilities and disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amounts
of
revenues and expenses during the reporting period. Actual
results could differ from those
estimates.
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Revenue
Recognition – The Company
charges fees to its customers in one of two ways as follows:
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1)
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Fixed
Transaction Fee. Fixed transaction fees are a fixed
percentage of the purchased invoice. This percentage does not
change from the date the purchased invoice is funded until the date
the
purchased invoice is collected.
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2)
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Variable
Transaction Fee. Variable transaction fees are
variable based on the length of time the purchased invoice is
outstanding. As specified in its contract with the
client, the Company charges variable increasing percentages of the
purchased invoice as time elapses from the purchase date to the collection
date.
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For
both Fixed and Variable Transaction fees, the Company recognizes
revenue
by using one of two methods depending on the type of
customer. For new customers the Company recognizes revenue
using the cost recovery method. For established customers the
Company recognizes revenue using the accrual
method.
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Under
the cost recovery method, all revenue is recognized upon collection
of the
entire amount of purchased accounts
receivable.
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The
Company considers new customers to be accounts whose initial funding
has
been within the last three months or less. Management believes
it needs three months of history to reasonably estimate a customer’s
collection period and accrued revenues. If three months of
history has a limited number of transactions, the cost recovery method
will continue to be used until a reasonable revenue estimate can
be made
based on additional history. Once the Company obtains
sufficient historical experience, it will begin using the accrual
method
to recognize revenue.
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For
established customers the Company uses the accrual method of
accounting. The Company applies this method by multiplying the
historical yield, for each customer, times the amount advanced on
each
purchased invoice outstanding for that customer, times the portion
of a
year that the advance is outstanding. The customers’ historical
yield is based on the Company’s last six months of experience with the
customer along with the Company’s experience in the customer’s industry,
if applicable.
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The
amounts recorded as revenue under the accrual method described above
are
estimates. As purchased invoices are collected, the Company
records the appropriate adjustments to record the actual revenue
earned on
each purchased invoice. These adjustments from the estimated revenue
to
the actual revenue have not been
material.”
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If
you
have any questions or comments, please do not hesitate to call.
| Very truly yours, | |||
| MORSE & MORSE, PLLC | |||
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By:
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/s/ Steven Morse, Managing Member | |