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This session discusses repurchase agreements (repos), defined as transactions where one party sells an item, such as inventory, and agrees to buy it back later at a higher price. For example, one sells inventory for $100 and later repurchases it for $106, effectively borrowing money rather than completing a sale. This mechanism highlights the significance of repos in finance, especially concerning revenue recognition. Understanding whether a company engages in a repo agreement is crucial for accurately assessing its financial activities.