What is the definition of a Repo 105?

Repo 105 is an accounting measure which is used by firms to move assets off-balance sheet to disguise their leverage and capital ratios. This is done by an agreement between two parties to exchange assets for cash for a very short term (usually when the financial statements are published) and then to trade back to the original situation.

Repo 105 was notoriously used by Lehman Brothers to disguise up to $50 billion in liabilities in order to reduce their accounted leverage and to make them look more stable.