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Income Taxes | 3 Months Ended
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Dec. 28, 2019
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 months ended December 28, 2019 was a benefit of 296.1% compared to a provision of 5.5% for the corresponding period in the prior year. The effective tax rate for the three months ended December 28, 2019 differed from the statutory tax rate primarily due to a $312.2 million discrete tax benefit related to the Medical Aesthetics business outside basis difference, partially offset by an increase in the Medical Aesthetics business valuation allowance. The outside basis difference is the difference between the carrying amount of an entity's investment for financial reporting purposes, and the underlying tax basis in that investment. An outside tax-over-book basis difference in an investment in a subsidiary results in the recognition of a deferred tax asset only when it becomes apparent that the reversal of the temporary difference will occur in the foreseeable future. As the Medical Aesthetics business met the assets held-for-sale criteria during the three months ended December 28, 2019, the requirement for recognition of the deferred tax asset for the outside basis difference was also met. For the three months ended December 29, 2018, the effective tax rate differed from the statutory tax rate primarily due to a $20.0 million discrete tax benefit recorded in the quarter related to an internal restructuring, earnings in jurisdictions subject to lower tax rates, and a $5.0 million benefit reduction from finalizing the computations under the Tax Cuts and Jobs Act enacted on December 22, 2017 (first quarter of fiscal 2018). Other Tax Accounting Pronouncements On October 24, 2016, the FASB issued ASU 2016-16, which removes the prohibition in ASC 740 against the immediate recognition of the current and deferred income tax effects of intra-entity transfers of assets other than inventory. Under ASU 2016-16, the selling (transferring) entity is required to recognize a current tax expense or benefit upon transfer of the asset. Similarly, the purchasing (receiving) entity is required to recognize a deferred tax asset or deferred tax liability, as well as the related deferred tax benefit or expense, upon receipt of the asset. This ASU is effective for annual periods beginning after December 15, 2017, and interim periods within those annual periods. The Company adopted ASU 2016-16 in the first quarter of fiscal 2019 on a modified retrospective basis through a cumulative-effect adjustment to decrease the opening balance of accumulated deficit within stockholders' equity as of September 30, 2018, the first day of fiscal 2019. This change in accounting principle resulted in an increase in deferred tax assets of $2.9 million, a decrease in accumulated deficit of $2.5 million, and a decrease in prepaid taxes of $0.4 million as of the beginning of the Company’s fiscal year beginning September 30, 2018. The Company was required to account for the internal restructuring discussed above under ASU 2016-16 and recorded a $29.1 million increase to income tax expense and income tax liabilities and a decrease of $49.1 million to deferred tax expense and net deferred tax liabilities for the three months ended December 29, 2018. The net result was an increase to net income of $20.0 million, or an earnings per share increase of $0.07. Non-Income Tax Matters The Company is subject to tax examinations for value added, sales-based, payroll, and other non-income tax items. A number of these examinations are ongoing in various jurisdictions. The Company takes certain non-income tax positions in the jurisdictions in which it operates pursuant to ASC 450. In the normal course of business, the Company's positions and conclusions related to its non-income tax positions could be challenged, resulting in assessments by governmental authorities. While the Company believes estimated losses previously recorded are reasonable, certain audits are still ongoing and additional charges could be recorded in the future.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
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