PARTIV Note1—OverviewandSummaryofSignificantAccountingPolicies PayPalHoldings,Inc. NotestoConsolidatedFinancialStatements Note1—OverviewandSummaryofSignificantAccountingPolicies OverviewandOrganization PayPalHoldings,Inc.(“PayPal,”the“Company,”“we,”“us,”or“our”)wasincorporatedinDelawareinJanuary2015andisa leadingtechnologyplatformthatenablesdigitalpaymentsandsimplifiescommerceexperiencesonbehalfofmerchants andconsumersworldwide.PayPaliscommittedtodemocratizingfinancialservicestohelpimprovethefinancialhealthof individuals and to increase economicopportunityfor entrepreneursand businessesof all sizes aroundthe world.Our goal is to enable our merchantsand consumerstomanageandmovetheirmoneyanywhereintheworldinthemarketswe ANNU serve, anytime, on any platform, and using any device when sendingpaymentsor gettingpaid,includingperson-to-person payments. AL Weoperate globally and in a rapidly evolving regulatory environment characterized by a heightened focus by regulators REPOR globally on all aspects of the payments industry, including countering terrorist financing, anti-money laundering, privacy, cybersecurity, and consumer protection. The laws and regulations applicable to us, including those enacted prior to the T advent of digital payments, continue to evolve through legislative and regulatory action and judicial interpretation. New or changinglawsandregulations,includingchangestotheirinterpretationandimplementation,aswellasincreasedpenalties and enforcement actions related to non-compliance, could have a material adverse impact on our business, results of operations, and financial condition. We monitor these areas closely and are focused on designing compliant solutions for ourcustomers. SignificantAccountingPolicies BasisofPresentationandPrinciplesofConsolidation The accompanying consolidated financial statements include the financial statements of PayPal and our wholly- and majority-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. The noncontrolling interest reported in a prior period was a component of equity on our consolidated balance sheets and represented the equity interests not owned by PayPal, and was recorded for consolidated entities we controlled and of which we owned less than 100%. Noncontrolling interest was not presented separately on our consolidated statements of income(loss)astheamountwasdeminimis. Investments in entities where we have the ability to exercise significant influence, but not control, over the investee are accounted for using the equity method of accounting. For such investments, our share of the investees results of operations is included in other income (expense), net on our consolidated statements of income (loss). Investments in entities where we do not have the ability to exercise significant influence over the investee are accounted for at fair value or cost minus impairment, if any, adjusted for changes resulting from observable price changes, which are included in other income (expense), net on our consolidated statements of income (loss). Our investment balance is included in long-term investmentsonourconsolidatedbalancesheets. Wedetermine at the inception of each investment, and re-evaluate if certain events occur, whether an entity in which we have madeaninvestmentis considereda variable interest entity (“VIE”). If we determine an investment is in a VIE, we then assessif wearetheprimarybeneficiary,whichwouldrequireconsolidation. AsofDecember31,2021,wehadconsolidatedtwoVIEsthatprovidedfinancingforandheldloansreceivableofPaidy,Inc. (“Paidy”). We were the primary beneficiary of the VIEs as we performed the servicing and collection for the loans receivable, which were the activities that most significantly impacted the VIEs economic performance, and we had the obligation to absorb the losses and/or the right to receive the benefits of the VIE that could potentially be significant to these entities. The financial results of these VIEs were included in our consolidated financial statements. As of December 31, 2021, the carrying value of the assets and liabilities of our consolidated VIEs was included as short-term investments of $87 million, loans and interest receivable, net of $21 million, and long-term debt of $98 million. Cash of $87 million, included in short-term investments, was restricted to settle the debt obligations. In the first quarter of 2022, we terminated Paidys legacy debt structure and replaced it with a new credit agreement executed in February 2022. As a result, we no longer have any consolidatedVIEs as of December31, 2022. See “Note 12—Debt” for additionalinformation. As of December 31, 2022 and December 31, 2021, the carrying value of our investments in nonconsolidated VIEs was $128 million and $74 million, respectively, and is included as non-marketable equity securities applying the equity method •2022AnnualReport 63