Income Taxes

3 Months Ended

Mar. 28, 2020

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

For the quarter ended March 28, 2020, the Company recorded income tax expense of $26,668 on earnings before income taxes of $137,133 for an effective tax rate of 19.4%, as compared to an income tax expense of $37,018 on earnings before income taxes of $158,593, for an effective tax rate of 23.3% for the quarter ended March 30, 2019. The difference in the effective tax rates for the comparative periods was caused by the geographical dispersion of profits and losses and the inability of the Company to make a reliable estimate of its annual effective tax rate.

In accordance with ASC 740-270, Interim Reporting, at the end of each interim period, the Company is required to determine the best estimate of its annual effective tax rate and then apply that rate in providing for income taxes on an interim period. However, in certain circumstances where the Company is unable to make a reliable estimate of the annual effective tax rate, ASC 740-270 allows the actual effective tax rate for the interim period to be used. For the first quarter ended March 28, 2020, the Company calculated its effective rate for the interim period and applied that rate to the interim period results. The Company used this approach because it was unable to reasonably estimate its annual effective rate due to the variability of the rate as a result of small changes in forecasted income, fluctuations in annual pre-tax income and loss between quarters, and the effects of being taxed in multiple tax jurisdictions.