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In this session, we discuss repurchase agreements (repos). A repo is a financial transaction where one party sells an asset, such as inventory, for cash and simultaneously agrees to buy it back at a higher price. For example, if an item is sold for $100, the seller will later repurchase it for $106. This structure functions as a borrowing mechanism, not a traditional sale. Understanding repos is crucial for revenue recognition, as it impacts how companies report transactions and their financial activities. Recognizing whether a transaction is a repo agreement helps clarify the company's financial position and obligations.