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Income Taxes | 9 Months Ended
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Jun. 27, 2020
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 27, 2020 was a provision of 19.0% and a benefit of 60.3%, respectively, compared to a provision of 17.8% and a benefit of 40.7%, respectively, for the corresponding periods in the prior year. The effective tax rate for the three months ended June 27, 2020 differed from the U.S. statutory tax rate primarily due to the geographic mix of income earned by our international subsidiaries which are taxed at rates lower than the U.S. statutory tax rate, the impact of the U.S. deduction for foreign derived intangible income, and reserve releases resulting from statute of limitations expirations, partially offset by the global intangible low-taxed income inclusion, and unbenefited foreign losses. The effective tax rate for the nine months ended June 27, 2020 differed from the U.S. statutory tax rate primarily due to a $312.8 million discrete net tax benefit related to the loss on the sale of the Medical Aesthetics business. For the three months ended June 29, 2019, the effective tax rate differed from the U.S. statutory tax rate primarily due to reserve releases resulting from statute of limitations expirations and favorable audit settlements, and earnings in jurisdictions subject to lower tax rates. For the nine months ended June 29, 2019, the effective tax rate differed from the U.S. statutory tax rate primarily due to the effect of the Medical Aesthetics impairment charge recorded in the second quarter of fiscal 2019, earnings in jurisdictions subject to lower tax rates, a $19.2 million discrete benefit related to an internal restructuring, reserve releases resulting from statute of limitations expirations and favorable audit settlements, and finalizing the impact of the enactment of the Tax Cuts and Jobs Act in the first quarter of fiscal 2019. During the nine months ended June 27, 2020, the Company's gross unrecognized tax benefits excluding interest increased from $101.6 million to $200.3 million primarily as a result of uncertain tax positions related to the divestiture of the Medical Aesthetics business, and to a lesser extent intercompany transfer pricing related to ordinary business operations, partially offset by reserve releases resulting from statute of limitations expirations. 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. Under ASU 2016-16 the Company recorded a $29.5 million increase to income tax expense and income tax liabilities and a decrease of $48.7 million to deferred tax expense and net deferred tax liabilities for the nine months ended June 29, 2019 related to intercompany transactions which involved intra-entity transfers of assets other than inventory. The net result was an increase to net income of $19.2 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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