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In this session, the topic of discussion is repurchase agreements, commonly known as repo agreements. A repurchase agreement involves one party selling an asset, such as inventory, for a fixed price (e.g., $100) with a promise to buy it back later at a higher price (e.g., $106). This arrangement is essentially a borrowing of funds rather than a true sale. The initial transaction gives the seller cash immediately while allowing them to regain possession of the asset later. Understanding repo agreements is crucial for revenue recognition as it helps determine the nature of the transaction, whether it is a financing activity or an outright sale.