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In this session, we discuss repurchase agreements, commonly known as repo agreements. A repo agreement involves a transaction where one party sells an item, such as inventory, for a specified amount, say $100, and simultaneously agrees to buy it back later for a higher price, e.g., $106. This arrangement may seem like a sale, but it is essentially a borrowing transaction. The seller receives cash upfront while committing to repurchase the item later at a premium. Understanding repo agreements is crucial for revenue recognition, as it impacts how companies report their financial transactions and assess whether they are engaging in true sales or financing activities.