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In this session, we discuss repurchase agreements, commonly known as repos. A repurchase agreement is a financial transaction where one party sells an asset, like inventory, for cash, with a plan to buy it back later at a higher price. For example, a seller may sell inventory for $100, and later agree to repurchase it for $106. This arrangement is not a typical sale; instead, it serves as a mechanism for borrowing money. Understanding these agreements is crucial for revenue recognition, as it helps clarify whether a company is genuinely engaging in a sale or merely entering into a financing arrangement.