SEC Comment Letter for PayPal Holdings, Inc. (PYPL) (CIK 0001633917) (PYPL) — Aug 24, 2018
PayPal Holdings, Inc. (PYPL) (CIK 0001633917)
Date: Aug. 24, 2018 · CIK: 0001633917 · Accession: 0000000000-18-026450
AI Filing Summary & Sentiment
Reasoning
Letter
Mail Stop 3561 August 24, 2018 Mr. Daniel H. Schulman President and Chief Executive Officer 2211 North First Street San Jose, California 95131
Re: PayPal Holdings, Inc. Form 10-K for Fiscal Year Ended December 31, 2017 Filed February 7, 2018 Form 10 -Q for Fiscal Quarter Ended June 30, 2018 Filed July 26, 2018 File No. 001 -36859
Dear Mr. Schulman :
We have reviewed your filing s and have the following comments. In some of our comments, we may ask you to provide us with information so we may better understand your disclosure.
Please respond to these comments within ten busine ss days by providing the requested information or advis e us as soon as possible when you will respond. If you do not believe our comments apply to your facts and circumstances , please tell us why in your response.
After reviewing your response to these comments, we may have additional comments.
Form 10 -Q for the Quarter Ended June 30, 2018
Financial Statements
Note 2 – Revenue
Transaction Revenue, page 10
1. We note you have determined that your transaction revenue represents a single performance obligation. Please tell us each promised good or service you have identified in these arrangements. In addition, provide us your analysis regarding how you determined that all goods and services in these arrangements should be combined. Reference 606 -10-25-19 through 22.
2. Your disclosure indicates that transaction fees collected from your customers are recognized as revenue on a gross basis because you are the principal in respect of
Mr. Daniel H. Schulman PayPal Holdings, Inc. August 24, 2018 Page 2
processing payments. Please describe the services provided by each party involved in the payment processing transaction and tell us how you determined you control each service before it is transferred to the customer. Reference ASC 606 -10-55-36 through 40.
Note 17 – Restructuring, page 33
3. We note the restructuring charges in the first half of 2018 include charges related to your decision to wind down TIO’s operations. We also note your disclosures about the intangi ble assets and net assets recognized in July 2017 upon acquisition of this business and the $30 million impairment of customer related intangible assets recognized during the fourth quarter of 2017 upon the suspe nsion of TIO’s operations. In light of your decision to wind down TIO’s operations, please tell us how you considered whether any of the remaining tangible and intangible assets of this business may be impaired. We may have further comment after reviewin g your response.
We remind you that the company and its management are responsible for the accuracy and adequacy of their disclosures, notwithstanding any review, comments, action or absence of action by the staff.
You may contact Sondra Snyder, Staff Accountant at (202) 551 -3332 or me at (202) 551 - 3737 with any questions.
Sincerely,
/s/ Jennifer Thompson
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Mail Stop 3561 August 24, 2018 Mr. Daniel H. Schulman President and Chief Executive Officer 2211 North First Street San Jose, California 95131 Re: PayPal Holdings, Inc. Form 10-K for Fiscal Year Ended December 31, 2017 Filed February 7, 2018 Form 10 -Q for Fiscal Quarter Ended June 30, 2018 Filed July 26, 2018 File No. 001 -36859 Dear Mr. Schulman : We have reviewed your filing s and have the following comments. In some of our comments, we may ask you to provide us with information so we may better understand your disclosure. Please respond to these comments within ten busine ss days by providing the requested information or advis e us as soon as possible when you will respond. If you do not believe our comments apply to your facts and circumstances , please tell us why in your response. After reviewing your response to these comments, we may have additional comments. Form 10 -Q for the Quarter Ended June 30, 2018 Financial Statements Note 2 – Revenue Transaction Revenue, page 10 1. We note you have determined that your transaction revenue represents a single performance obligation. Please tell us each promised good or service you have identified in these arrangements. In addition, provide us your analysis regarding how you determined that all goods and services in these arrangements should be combined. Reference 606 -10-25-19 through 22. 2. Your disclosure indicates that transaction fees collected from your customers are recognized as revenue on a gross basis because you are the principal in respect of Mr. Daniel H. Schulman PayPal Holdings, Inc. August 24, 2018 Page 2 processing payments. Please describe the services provided by each party involved in the payment processing transaction and tell us how you determined you control each service before it is transferred to the customer. Reference ASC 606 -10-55-36 through 40. Note 17 – Restructuring, page 33 3. We note the restructuring charges in the first half of 2018 include charges related to your decision to wind down TIO’s operations. We also note your disclosures about the intangi ble assets and net assets recognized in July 2017 upon acquisition of this business and the $30 million impairment of customer related intangible assets recognized during the fourth quarter of 2017 upon the suspe nsion of TIO’s operations. In light of your decision to wind down TIO’s operations, please tell us how you considered whether any of the remaining tangible and intangible assets of this business may be impaired. We may have further comment after reviewin g your response. We remind you that the company and its management are responsible for the accuracy and adequacy of their disclosures, notwithstanding any review, comments, action or absence of action by the staff. You may contact Sondra Snyder, Staff Accountant at (202) 551 -3332 or me at (202) 551 - 3737 with any questions. Sincerely, /s/ Jennifer Thompson Jennifer Thompson Accounting Branch Chief Office of Consumer Products