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This session discusses repurchase agreements (repos), where one party sells an asset (e.g., inventory) to another for cash and agrees to repurchase it later at a higher price. For example, Party A sells inventory for $100 and agrees to buy it back for $106. This transaction is not a traditional sale but rather a borrowing mechanism, as the seller effectively secures funds while maintaining inventory. Understanding repos is crucial for revenue recognition, as it helps determine if a company is engaging in financing transactions rather than outright sales. This highlights the need to correctly categorize such agreements for accurate financial reporting.