content: SECURITIES AND EXCHANGE COMMISSION
  
                               Washington, D.C. 20549
  
                                      FORM 8-K
  
                                   CURRENT REPORT
  
       Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
  
  
          Date of Report (Date of earliest event reported): October 5, 2005
                                                            ---------------
  
                        ATEL Capital Equipment Fund VII, L.P
  --------------------------------------------------------------------------------
               (Exact name of registrant as specified in its charter)
  
  
          California                   000-24175                   94-3248318
  --------------------------------------------------------------------------------
  (State or other jurisdiction       (Commission                  (IRS Employer
       of incorporation)             File Number)              Identification No.)
  
  
       600 California Street, 6th Floor, San Francisco, California 94108-2733
  --------------------------------------------------------------------------------
                 (Address of principal executive offices) (Zip Code)
  
  
         Registrant's telephone number, including area code: (415) 989-8800
                                                             --------------
  
                                         N/A
      -------------------------------------------------------------------------
            (Former name or former address, if changed since last report)
  
  
  <PAGE>
  
  
  Item 2.02  Results of Operation and Financial Condition
  
  The registrant is currently assessing the need to restate financial statements
  for the years ended December 31, 2004, 2003 and 2002, and the first two fiscal
  quarters of 2005, as described in more detail under Item 4.02 below, which is
  incorporated herein by reference.
  
  Item 4.02   Non-Reliance on Previously Issued Financial Statements or a Related
  Audit Report or Completed Interim Review.
  
  On October 5, 2005, the registrant's manager determined that the methods used to
  accumulate and amortize the initial direct costs ("IDCs") incurred in acquiring
  its portfolio of leases were not in accordance with generally accepted
  accounting principles ("GAAP"). The registrant's manager is in the process of
  analyzing the potential impact of changing the methods used to accumulate and
  amortize the IDC's incurred. The registrant's manager, including the officers of
  the manager acting as the registrant's audit committee, have discussed the
  matters in this report and will continue to discuss this matter with its
  registered public accounting firm. Accordingly, the registrant's financial
  statements for the years ended December 31, 2004 , 2003 and 2002, and the first
  two fiscal quarters of 2005 should no longer be relied upon.
  
   If the registrant deems any resulting difference in previously reported
  information to be material to its financial statements, the registrant will
  prepare and file an amended annual report on Form 10-K with restated audited
  financial statements and amended Management Discussion and Analysis for the
  years ended December 31, 2004, 2003 and 2002, with footnote disclosure on the
  cumulative changes to prior years, as well as amended quarterly reports on Form
  10-Q for the first two fiscal quarters of 2005 The registrant anticipates that
  it will complete its analysis and file any required amended reports within 45
  days from the date of this report.
  
  The registrant has historically calculated its amortization of IDCs over a
  period of 60 months which it estimated to approximate the average of the lease
  terms in its portfolio of equipment lease investments. Statement of Financial
  Accounting Standards No. 13 - "Accounting for Leases" requires that the IDCs
  incurred in connection with each lease be determined and amortized on a lease by
  lease basis, with respect to operating leases, and using an effective interest
  rate method, with respect to direct financing leases. The registrant has
  previously determined that the impact of changing the method used to amortize
  the IDC's , was less than .04% of total assets and .07% of members' equity for
  any one year; and results in a maximum increase in net income of approximately
  $42,000 and a maximum decrease in net income of approximately $18,000 for any
  one year. The above calculations indicating the change in method of amortizing
  the IDC costs exclude the impact of changes in the cost accumulated if any, as
  discussed below.
  
  In addition to the change in amortization methodology, the registrant's manager
  is reviewing and analyzing its procedures, methods and documentation for
  calculating those costs which may appropriately be characterized, capitalized
  and amortized as IDCs, and those which must instead be recognized as expenses
  for the periods in which they are incurred, and its methods for allocating IDCs
  and expenses incurred by the manager and its affiliates in connection with
  portfolio acquisition activities. If any amounts previously characterized as
  IDCs are instead recharacterized as expenses, it would result in a reduction in
  net income (or increase in net loss) during the period the recharacterized
  expense was incurred, and a corresponding increase in net income (or reduction
  in net loss) during any subsequent period during which the expense had
  previously been amortized. In other words, any change in the characterization of
  certain expenditures as expenses rather than IDCs to be capitalized will result
  in a shift in the timing of the registrant's recognition of the impact of the
  cost incurred on its net income or loss. If the registrant determines that any
  recharacterization of costs as IDCs or expenses or any reallocation of such
  costs would result in a material change to its previously reported financial
  statements it will adjust the financial statements accordingly.
  
  
  <PAGE>
  
  
  
  
  
  
  
  SIGNATURES
  
  Pursuant to the requirements of the Securities Exchange Act of 1934, the
  registrant has duly caused this report to be signed on its behalf by the
  undersigned thereunto duly authorized.
  
  Dated:   October 11, 2005
  
                              ATEL Cash Distribution Fund VII, L.P.
                              By ATEL Financial Services, LLC,
                              General Partner of Registrant
  
                                      By:  /s/ Paritosh K, Choksi
                                               ----------------------------------
                                               Paritosh K. Choksi, Executive Vice
                                               President, Chief Financial Officer
                                               and Chief Operating Officer
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metadata_filer: {"company-data": {"conformed-name": "ATEL CAPITAL EQUIPMENT FUND VII LP", "cik": "0001019542", "assigned-sic": "7359", "irs-number": "943248318", "state-of-incorporation": "CA", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "000-24175", "film-number": "051133028"}, "business-address": {"street1": "600 CALIFORNIA STREET 6TH FLOOR", "city": "SAN FRANCISCO", "state": "CA", "zip": "94108", "phone": "4159898800"}, "mail-address": {"street1": "600 CALIFORNIA STREET", "street2": "SIXTH FLOOR", "city": "SAN FRANCISCO", "state": "CA", "zip": "94108"}}
text: SECURITIES AND EXCHANGE COMMISSION
  
                               Washington, D.C. 20549
  
                                      FORM 8-K
  
                                   CURRENT REPORT
  
       Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
  
          Date of Report (Date of earliest event reported): October 5, 2005
                                                            ---------------
  
                        ATEL Capital Equipment Fund VII, L.P
  --------------------------------------------------------------------------------
               (Exact name of registrant as specified in its charter)
  
          California                   000-24175                   94-3248318
  --------------------------------------------------------------------------------
  (State or other jurisdiction       (Commission                  (IRS Employer
       of incorporation)             File Number)              Identification No.)
  
       600 California Street, 6th Floor, San Francisco, California 94108-2733
  --------------------------------------------------------------------------------
                 (Address of principal executive offices) (Zip Code)
  
         Registrant's telephone number, including area code: (415) 989-8800
                                                             --------------
  
                                         N/A
      -------------------------------------------------------------------------
            (Former name or former address, if changed since last report)
  Item 2.02  Results of Operation and Financial Condition
  
  The registrant is currently assessing the need to restate financial statements
  for the years ended December 31, 2004, 2003 and 2002, and the first two fiscal
  quarters of 2005, as described in more detail under Item 4.02 below, which is
  incorporated herein by reference.
  
  Item 4.02   Non-Reliance on Previously Issued Financial Statements or a Related
  Audit Report or Completed Interim Review.
  
  On October 5, 2005, the registrant's manager determined that the methods used to
  accumulate and amortize the initial direct costs ("IDCs") incurred in acquiring
  its portfolio of leases were not in accordance with generally accepted
  accounting principles ("GAAP"). The registrant's manager is in the process of
  analyzing the potential impact of changing the methods used to accumulate and
  amortize the IDC's incurred. The registrant's manager, including the officers of
  the manager acting as the registrant's audit committee, have discussed the
  matters in this report and will continue to discuss this matter with its
  registered public accounting firm. Accordingly, the registrant's financial
  statements for the years ended December 31, 2004 , 2003 and 2002, and the first
  two fiscal quarters of 2005 should no longer be relied upon.
  
   If the registrant deems any resulting difference in previously reported
  information to be material to its financial statements, the registrant will
  prepare and file an amended annual report on Form 10-K with restated audited
  financial statements and amended Management Discussion and Analysis for the
  years ended December 31, 2004, 2003 and 2002, with footnote disclosure on the
  cumulative changes to prior years, as well as amended quarterly reports on Form
  10-Q for the first two fiscal quarters of 2005 The registrant anticipates that
  it will complete its analysis and file any required amended reports within 45
  days from the date of this report.
  
  The registrant has historically calculated its amortization of IDCs over a
  period of 60 months which it estimated to approximate the average of the lease
  terms in its portfolio of equipment lease investments. Statement of Financial
  Accounting Standards No. 13 - "Accounting for Leases" requires that the IDCs
  incurred in connection with each lease be determined and amortized on a lease by
  lease basis, with respect to operating leases, and using an effective interest
  rate method, with respect to direct financing leases. The registrant has
  previously determined that the impact of changing the method used to amortize
  the IDC's , was less than .04% of total assets and .07% of members' equity for
  any one year; and results in a maximum increase in net income of approximately
  $42,000 and a maximum decrease in net income of approximately $18,000 for any
  one year. The above calculations indicating the change in method of amortizing
  the IDC costs exclude the impact of changes in the cost accumulated if any, as
  discussed below.
  
  In addition to the change in amortization methodology, the registrant's manager
  is reviewing and analyzing its procedures, methods and documentation for
  calculating those costs which may appropriately be characterized, capitalized
  and amortized as IDCs, and those which must instead be recognized as expenses
  for the periods in which they are incurred, and its methods for allocating IDCs
  and expenses incurred by the manager and its affiliates in connection with
  portfolio acquisition activities. If any amounts previously characterized as
  IDCs are instead recharacterized as expenses, it would result in a reduction in
  net income (or increase in net loss) during the period the recharacterized
  expense was incurred, and a corresponding increase in net income (or reduction
  in net loss) during any subsequent period during which the expense had
  previously been amortized. In other words, any change in the characterization of
  certain expenditures as expenses rather than IDCs to be capitalized will result
  in a shift in the timing of the registrant's recognition of the impact of the
  cost incurred on its net income or loss. If the registrant determines that any
  recharacterization of costs as IDCs or expenses or any reallocation of such
  costs would result in a material change to its previously reported financial
  statements it will adjust the financial statements accordingly.
  SIGNATURES
  
  Pursuant to the requirements of the Securities Exchange Act of 1934, the
  registrant has duly caused this report to be signed on its behalf by the
  undersigned thereunto duly authorized.
  
  Dated:   October 11, 2005
  
                              ATEL Cash Distribution Fund VII, L.P.
                              By ATEL Financial Services, LLC,
                              General Partner of Registrant
  
                                      By:  /s/ Paritosh K, Choksi
                                               ----------------------------------
                                               Paritosh K. Choksi, Executive Vice
                                               President, Chief Financial Officer
                                               and Chief Operating Officer