Fix shape in the Repurchase Agreement

Aug 6th, 2022
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How to fix shape in the Repurchase Agreement

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[Music] welcome to this video today we are going to talk about the repurchase agreement ing to ifrs15 dont forget to subscribe to this channel and activate the notifications today we are going to solve a practical exercise related to the repurchase of assets ing to ifrs15 this is the example of a company that signs three contracts with three different clients the characteristics of each contract are the following in the first contract with customer one a machine is sold for three million five hundred thousand with the right or obligation to repurchase the asset for two million nine hundred thousand the maximum term to exercise the repurchase option is one year from january 2018. the second contract has the same characteristics as contract one except that the repurchase price is three million seven hundred thousand and in the third contract we have that the repurchase price is two million nine hundred thousand and a fair value of four million unlike the previous contracts where the ent

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A repurchase agreement (repo) is a short-term secured loan: one party sells securities to another and agrees to repurchase those securities later at a higher price. The securities serve as collateral.
In a repo, one party sells an asset (usually fixed-income securities) to another party at one price and commits to repurchase the same or another part of the same asset from the second party at a different price at a future date or (in the case of an open repo) on demand.
A repurchase agreement is a contractual arrangement between two parties, where one party agrees to sell securities to another party at a specified price with a commitment to buy the securities back at a later date for another (usually higher) specified price.
A repurchase agreement (repo) refers to short-term borrowing for dealers in government securities. In the event of a repo, a dealer sells government securities to investors, normally on an overnight basis, and then buys it back the next day at a slightly higher price.
The lifecycle of a repurchase agreement involves a party selling a security to another party and simultaneously signing an agreement to repurchase the same security at a future date at a specified price. The repurchase price is slightly higher than the initial sale price to reflect the time value of money.
A repo curve is defined as an adjustment to the discount curve in the pricing of a bond/FRN, when the credit default swaps (CDS) market implied default probability of the issuer is used in the pricing.
A repurchase agreement (repo) is a form of short-term borrowing for dealers in government securities. For a repo, a dealer sells government securities to an investor, usually overnight, and buys them back the following day at a slightly higher price.

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