According to ASC 470-40-05-02 shown above, what is a sale with a repurchase agreement considered? What term is often used to describe these type of transactions? Can you provide examples and how they are used in accounting

DOCUMENT ARCHIVE WHAT LINKS HERE 470 Debt 40 Product Financing Arrangements 05 Overview and Background Table of Contents Collapse Expand 9470 Daht E 40 Product Financing Arrangements E 05 Overview and Background General General Note: The Overview and Background Section provides overview and background material for the guidance contained in the Subtopic. It does not provide the historical background or due process. It may contain certain material that users generally consider useful to understand the typical situations addressed by the standards. The Section does not summarize the accounting and reporting requirements General COMBINE SUBSECTIONS ? 05-1 This Subtopic establishes guidance for determining whether an arrangement involving the sale of Inventory is in substance a financing arrangement. 05-2 Product financing arrangements include agreements in which a sponsor (the entity seeking to finance product pending its future use or resale) does any of the following: a. Sells the product to another entity (the entity through which the financing Mows), and in a related transaction agrees to repurchase the product (ar a substantially identical product) 6. Arranges for another entity to purchase the product on the sponsor's behalf and, in a related transaction, agrees to purchase the product from the other entity C. Controls the disposition of the praduct that has been purchased by another entity in accordance with the arrangements described in either (a) or (b). 05-3 In all of the foregoing cases, the sponsor agrees to purchase the product, ar processed goods of which the product is a component, from the other entity at specified prices over specified periods or, to the extent that it does not do so, guarantees resale prices to third parties (see paragraph 470-40-15-2(a)(1)). The Implementation Guidance in Section 470-40-55 illustrates each of the types of arrangements described in (a) and (b) of the preceding paragraph. Pending Content: ? Transition Date: (P) December 16, 2017; (N) December 16, 2018 | Transition Guidance: 606-10-65-1 In all of the foregoing cases, the sponsor agrees to purchase the product, or processed goods of which the product is a component, from the ather entity at specified prices over specified periods or, to the extent that it does not do so, guarantees resale prices to third parties (see paragraph 470-40-15-2(a)(1)). The Implementation Guidance in Section 470-40-55 illustrates the arrangement described in (b) of the preceding paragraph. For an arrangement described in (a), see Topic 506 on revenue from contracte with customers for guidance on repurchase agreements in paragraphs 606-10-55-66 through 55-78 and an illustration on repurchase agreements in Example 62, Case A, paragraphs 606-10-55.401 through 55-404