By closing a sale with a buyback agreement, X receives the money they need, while recording a sale and reducing their debt ratio. Once their (hopefully) temporary lack of cash is over, they will be able to buy back the previously sold inventory. An agreement in which an asset is sold from one party to another on terms that provide that the seller will redeem the asset in certain circumstances. Sales and retirement transactions, which are examples of off-balance-sheet financing, are covered in Financial Reporting Standard 5, Reporting the Substance of Transactions; for financial assets, international accounting standard IAS 39 is the approach and valuation. . . .