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    jojo_1114's Avatar
    jojo_1114 Posts: 1, Reputation: 1
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    #1

    Jan 26, 2010, 03:34 PM
    Repurchase agreement
    Repurchase agreement specifies that it will negotiate the price to be paid at the time of re purchase?
    rehmanvohra's Avatar
    rehmanvohra Posts: 739, Reputation: 27
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    #2

    Jan 27, 2010, 12:20 AM

    What exactly is your question? However, it is usual to fix the repurchase price at the time of agreement and can not be deferred.

    This case is an example of "substance over form". There are two cases falling under this head:
    1. Sale and buy back of inventories
    2. Sale and lease back of non current assets

    In any case, if the risks and rewards are not transferred to the buyer, then the transaction is a loan. The difference between the purchase price and the sales price is the interest.
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