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In this session, we discuss repurchase agreements, commonly referred to as repos. A repurchase agreement involves a seller selling an asset, such as inventory, for cash. For example, if I sell you inventory for $100, we simultaneously agree that I will buy it back for $106. This arrangement is not a traditional sale; rather, it functions as a loan, where I am effectively borrowing money. Understanding repo agreements is crucial for revenue recognition, as it clarifies whether a transaction is truly a sale or a financing arrangement. This distinction is important for accurate financial reporting and analysis.