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Income Taxes
9 Months Ended
Jun. 25, 2016
Income Tax Disclosure [Abstract]  
Income Taxes
Income Taxes
In accordance with ASC 740, Income Taxes (ASC 740), each interim period is considered integral to the annual period, and tax expense is measured using an estimated annual effective tax rate. An entity is required to record income tax expense each quarter based on its annual effective tax rate estimated for the full fiscal year and use that rate to provide for income taxes on a current year-to-date basis, adjusted for discrete taxable events that occur during the interim period.
The Company’s effective tax rate for the three and nine months ended June 25, 2016 was 16.1% and 22.5%, respectively, compared to 37.1% and 29.8%, respectively, for the corresponding periods in the prior year. For the current three and nine months ended June 25, 2016, the effective tax rate was lower than the statutory tax rate primarily due to foreign profits at lower tax rates, the domestic production activities deduction benefit, a favorable state audit settlement, and a change in the valuation allowance related to the sale of a marketable security that had a gain for book purposes. For the three months ended June 27, 2015, the effective tax rate was higher than the statutory tax rate primarily due to the non-deductible write-off of the cumulative translation adjustment related to one of the Company's subsidiaries that was deemed to be substantially liquidated in the third quarter of fiscal 2015. For the nine months ended June 27, 2015, the effective tax rate was lower than the statutory tax rate primarily due to domestic production activities deduction benefit and reserve reversals attributable to a favorable income tax audit settlement, partially offset by the non-deductible cumulative translation adjustment write-off.
In November 2015, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2015-17, Balance Sheet Classification of Deferred Taxes. ASU 2015-17 simplifies the presentation of deferred income taxes by eliminating the requirement for entities to separate deferred income tax liabilities and assets into current and noncurrent amounts in the balance sheet. Rather, it requires that deferred tax assets and liabilities are classified as noncurrent in the balance sheet. The Company adopted this standard prospectively in the first quarter of fiscal 2016, and prior periods were not retrospectively adjusted.
The Company's consolidated Federal income tax returns for fiscal 2013 and 2014 are currently under audit, which commenced during the three months ended June 25, 2016.