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In this session, repurchase agreements (repos) are discussed. A repo involves one party selling an asset, such as inventory, for cash and then agreeing to buy it back later at a higher price. For example, a seller sells inventory for $100 and agrees to repurchase it for $106. This transaction isn't a typical sale; rather, it functions as a borrowing mechanism. The cash received serves as a loan, and the repurchase price covers the interest. Understanding repos is crucial for revenue recognition, as it clarifies whether a seller is engaged in a financing transaction or a sale.