Mail Stop 0510
April 8, 2005
via U.S. mail and facsimile
Ms. Kimberly A. Springsteen
Chief Financial Officer
Commonwealth Income & Growth Fund IV
470 John Young Way
Exton, PA 19341
RE: Form 10-K for the fiscal year ended December 31, 2004
File No. 333-62526
Dear Ms. Springsteen:
We have reviewed these filings and have the following
comments.
If you disagree with a comment, we will consider your explanation
as
to why our comment is inapplicable or a revision is unnecessary.
Please be as detailed as necessary in your explanation. In some
of
our comments, we may ask you to provide us with supplemental
information so we may better understand your disclosure. After
reviewing this information, we may or may not raise additional
comments.
Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects. We welcome
any questions you may have about our comments or on any other
aspect
of our review. Feel free to call us at the telephone numbers
listed
at the end of this letter.
FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 2004
Comments applicable to your overall filing
1. Where a comment below requests additional disclosures or other
revisions to be made, please show us in your supplemental response
what the revisions will look like. These revisions should be
included in your future filings.
Item 7 - Management`s Discussion and Analysis of Financial
Condition
and Results of Operations
Liquidity and Capital Resources, page 17
2. Please disclose the amount you expect to invest in equipment in
2005 and how you anticipate funding these investments.
Item 9A. Controls and Procedures, page 21
3. Please disclose whether there have been any changes in your
internal controls and procedures during the most recently
completed
quarter. See Item 308 of Regulation S-K.
Item 15 - Exhibits, Financial Statement Schedules and Reports on
Form
10-K
4. Please disclose the beginning and ending balances, as well as
charges to and deductions from your valuation accounts. See Rules
5-
04 and 12-09 of Regulation S-X.
Financial Statements
Note 2 - Summary of Significant Accounting Policies
Revenue Recognition, page 12
5. Please disclose how you account for (a) step rent provisions
and
escalation clauses and (b) capital improvement funding and other
lease concessions, which may be present in your leases. Paragraph
19.b. of SFAS 13 discusses how rent should be reported as income
over
the lease term as it becomes receivable. However, if the rentals
vary from a straight-line basis, the income shall be recognized on
a
straight-line basis unless another basis is more representative of
the time pattern in which the benefit from the leased property is
diminished. In addition, paragraph 5.n. of SFAS 13, as amended by
SFAS 29, discusses how lease revenues that depend on an existing
index or rate, such as the consumer price index or the prime
interest
rate, should also be included in your minimum lease revenues. If,
as
we assume, they are taken into account in computing your minimum
lease revenues, the note should so state. If our assumption is
incorrect, please tell us how your accounting complies with SFAS
13
and FTB 88-1.
Long-Lived Assets, page 13
6. Please disclose the facts and circumstances that led to the
impairment of certain assets, as well as a description of the
impaired assets. See paragraph 26.a. of SFAS 144.
Accounts Receivable, page 14
7. Please disclose the amount of your allowance for doubtful
accounts
for each of the two years ended December 31, 2004. See Rule 5-
02(4)
of Regulation S-X.
Note 3 - Computer Equipment, page 15
8. Please disclose that you pay remarketing fees to the leasing
companies from which you purchase leases. Please disclose the
amounts you have paid in the last three years and the related
accounting treatment. Please also disclose the types of other
lease
acquisition costs you incur and your related accounting treatment
for
them as well.
* * * *
Please respond to these comments within 10 business days, or
tell us when you will provide us with a response. Please provide
us
with a supplemental response letter that keys your responses to
our
comments and provides any requested supplemental information.
Detailed letters greatly facilitate our review. Please file your
supplemental response on EDGAR as a correspondence file. Please
understand that we may have additional comments after reviewing
your
responses to our comments.
We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filings reviewed by the staff to
be
certain that they have provided all information investors require
for
an informed decision. 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 connection with responding to our comments, please
provide,
in writing, a statement from the company acknowledging that:
* the company is responsible for the adequacy and accuracy of the
disclosure in their 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 filing; 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 States.
In addition, please be advised that the Division of
Enforcement has access to all information you provide to the staff
of
the Division of Corporation Finance in our review of your filing
or
in response to our comments on your filing.
If you have any questions regarding these comments, please
direct them to Jeffrey Gordon, Staff Accountant, at (202) 824-5685
or, in his absence, to the undersigned at (202) 942-1774.
Sincerely,
Rufus Decker
Accounting Branch Chief
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Ms. Kimberly A. Springsteen
April 8, 2005
Page 1 of 4
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-0510
DIVISION OF
CORPORATION FINANCE