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In this session, we discuss repurchase agreements (repos). A repurchase agreement is a financial transaction where one party sells an asset, such as inventory, for a set price (e.g., $100), with an agreement to buy it back later at a higher price (e.g., $106). This process effectively allows the seller to borrow money, as the initial cash received is not a completed sale. The importance of repos lies in revenue recognition, as it helps determine whether a company is engaged in a repo agreement or another type of transaction. Understanding this distinction is crucial for accurate financial reporting.