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In this session, we discuss repurchase agreements (repos), which are financial transactions where one party sells an asset and agrees to buy it back later at a higher price. For example, if I sell you inventory for $100 and agree to repurchase it for $106, the initial cash transaction is not a sale but a means of borrowing money. This mechanism is significant for revenue recognition, as it is essential to determine whether a company is engaged in a repo agreement or a straightforward sale. Understanding repos helps clarify the financial position and cash flow of the involved parties.