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TAXES ON INCOME
 12 Months Ended
Oct. 01, 2021
Income Tax Disclosure [Abstract]  
TAXES ON INCOME TAXES ON INCOME    Income tax expense or benefit is based on reported income or loss before income taxes. Deferred income taxes reflect the effect of temporary differences between asset and liability amounts that are recognized for financial reporting purposes and the
amounts that are recognized for income tax purposes. These deferred taxes are measured by applying currently enacted tax laws. Valuation allowances are recognized to reduce deferred tax assets to the amount that is more likely than not to be realized.
    Income tax expense (benefit) was as follows:
Fiscal Years
(In millions)202120202019
Current income tax expense (benefit)
Federal
$5.4 $(16.3)$9.2 
State and local
1.4 (1.4)1.3 
Foreign
6.8 5.7 6.8 
Total current
$13.6 $(12.0)$17.3 
Deferred income tax expense (benefit):
Federal
$1.8 $(1.7)$(10.0)
State and local
(1.3)0.6 (1.6)
Foreign
(3.4)(2.1)— 
Total deferred
$(2.9)$(3.2)$(11.6)
Income tax expense (benefit)$10.7 $(15.2)$5.7 

    Income (loss) before taxes are generated from the following geographic areas:
Fiscal Years
(In millions)202120202019
United States
$(4.1)$(74.1)$5.9 
Foreign
32.7 1.5 15.6 
Income (loss) before taxes$28.6 $(72.6)$21.5 

    The effective tax rate differs from the U.S. federal statutory tax rate as a result of the following:
Fiscal Years
2021
2020 (1)
2019 (1)
Federal statutory income tax rate
21.0 %21.0 %21.0 %
State and local taxes, net of federal tax benefit
0.3 1.0 (0.9)
Mandatory repatriation tax on foreign earnings— — 1.9 
Return to provision4.2 2.8 (4.7)
Research and development credit
(4.2)3.7 (10.2)
Prior year research and development credit(0.3)— — 
Prior year deferred tax adjustments— 0.4 4.7 
Foreign rate difference1.7 (0.4)6.0 
Foreign research innovation box(3.8)— — 
Change in valuation allowance8.4 (11.0)11.2 
U.S. tax reform - international provisions(0.7)— (4.7)
U.S. net operating loss carryback5.2 5.6 — 
Other5.6 (2.2)2.2 
Effective tax rate
37.4 %20.9 %26.5 %
(1)Certain prior year amounts have been reclassified to conform to current year presentation.
    During fiscal year 2021, the Company's effective tax rate varied from the U.S. federal statutory rate of 21% primarily because of the unfavorable impact of U.S. deferred tax attributes and losses in certain foreign jurisdictions for which a valuation allowance is provided and a reduction in benefit for U.S. net operating losses carried back to prior years. These unfavorable items are partially offset by the favorable impact of R&D tax credits and U.S. tax reform international provisions.
    During fiscal year 2020, the Company’s effective tax rate varied from the U.S. federal statutory rate of 21% primarily because of the favorable impact of U.S. net operating losses to be carried back to tax years with greater U.S. federal statutory rates. These favorable tax items were mostly offset by the unfavorable impact of additional losses in certain foreign jurisdictions, limitations on interest expense, and R&D credits for which no benefit is recognized.
    During fiscal year 2019, the Company’s effective tax rate varied from the U.S. federal statutory rate of 21% primarily because of the favorable impact of changes to the U.S. corporate tax structure resulting from U.S. Tax Reform, and U.S. research and development tax credits. These favorable U.S. tax items were offset by losses in certain foreign jurisdictions for which no benefit is recognized and earnings in other foreign jurisdictions that are taxed at higher rates.
    The Company has estimated its fiscal year 2021 GILTI (global intangible low-taxed income), BEAT (base-erosion anti-abuse tax), FDII (foreign-derived intangible income), limitations on interest expense deductions, and other components of U.S. Tax Reform, and have included these amounts in the calculation of the fiscal year 2021 tax provision. The Company has made an accounting policy election, as allowed by the SEC and FASB, to recognize the impact of GILTI as a period cost if and when incurred.
    Significant components of deferred tax assets and liabilities are as follows:
(In millions)October 1, 2021
October 2, 2020 (1)
Deferred tax assets:
Inventory adjustments$4.9 $4.4 
Share-based compensation5.5 4.2 
Product warranty1.8 1.7 
Deferred compensation1.6 1.3 
Net operating loss carryforwards25.7 27.0 
Accrued vacation1.0 1.0 
Accrued incentives4.2 1.7 
Credit carryforwards3.3 5.9 
Deferred financing fees3.0 3.3 
Interest expense limitation4.3 4.7 
Lease liabilities6.8 7.2 
Other6.4 4.3 
$68.5 $66.7 
Valuation allowance(30.2)(28.7)
Total deferred tax assets$38.3 $38.0 
Deferred tax liabilities:
Acquired intangibles$(13.9)$(16.6)
Property, plant and equipment(13.0)(12.4)
Investments in privately held companies(1.8)(2.8)
Operating lease assets(6.5)(6.7)
Other(1.3)(1.3)
Total deferred tax liabilities(36.5)(39.8)
Net deferred tax assets$1.8 $(1.8)
Reported As:
Deferred tax assets$38.3 $38.0 
Deferred tax liabilities(36.5)(39.8)
Net deferred tax assets (liabilities)$1.8 $(1.8)
(1)Certain prior year amounts have been reclassified to conform to current year presentation.
    The Company is maintaining its reinvestment assertion with respect to foreign earnings for the year ended October 1, 2021, which is that all earnings prior to fiscal year 2018 are permanently reinvested for all countries, and that all earnings for Direct Conversion, located primarily in Sweden and Finland, are also indefinitely reinvested in those countries, but post fiscal year 2017 earnings in all other countries are not permanently reinvested. Due to the level of earnings available for repatriation, the treaty benefits applicable to jurisdictions in which those earnings are located, and the now favorable U.S. tax treatment of repatriated foreign earnings, the amount of deferred tax liability recorded related to the potential repatriation is approximately $0.1 million. This estimated liability is for U.S. state income taxes and foreign withholding taxes that would apply if the foreign earnings were repatriated in the form of a dividend.
    As of October 1, 2021, the Company had foreign net operating loss carryforwards ("NOL") of approximately $25.7 million with $2.6 million expiring between 2021 and 2030 and $23.1 million carried forward indefinitely. On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was enacted in response to the COVID-19 pandemic. The CARES Act, among other things, permits NOL carryovers and carrybacks to offset 100% of taxable income for taxable years beginning before 2021. In addition, the CARES Act allows NOLs incurred in 2018, 2019, and 2020 to be carried back to each of the five preceding taxable years to generate a refund of previously paid income taxes. On July 2, 2020, the US Treasury Department issued a regulation providing an election to waive NOL carryback to a former consolidated group. During fiscal year 2021, the Company filed NOL carryback claims for U.S. losses incurred during fiscal year 2020 and anticipates cash tax refunds on those claims.
    The valuation allowance relates primarily to net operating losses in certain foreign jurisdictions, limitations on interest expense deductions, and other deferred tax attributes where, based on the weight of available evidence, it is more likely than not that the tax benefit will not be realized. The valuation allowance increased by $1.5 million during fiscal year 2021 and increased by $9.9 million during fiscal year 2020. The increase during the current year was primarily related to other U.S. deferred tax attributes.
    Changes in the Company's valuation allowance for deferred tax assets were as follows:
Fiscal Years
(In millions)202120202019
Valuation allowance balance–beginning of fiscal year$28.7 $18.8 $4.0 
Increases resulting from business combinations— — 12.0 
Other increases5.4 10.2 2.8 
Other decreases(3.9)(0.3)— 
Valuation allowance balance—end of fiscal year$30.2 $28.7 $18.8 

    The Company accounts for uncertainty in income taxes following a two-step approach for recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining whether the weight of available evidence indicates that it is more likely than not that, based on the technical merits, the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon settlement.
    Changes in the Company’s unrecognized tax benefits were as follows:
Fiscal Years
(In millions)20212020
Unrecognized tax benefits balance–beginning of fiscal year$0.8 $0.6 
Additions based on tax positions related to a prior year0.4 0.2 
Additions based on tax positions related to the current year0.1 — 
Reductions resulting from the expiration of the applicable statute of limitations(0.2)— 
Unrecognized tax benefits balance—end of fiscal year$1.1 $0.8 

    As of October 1, 2021 and October 2, 2020, the total amount of gross unrecognized tax benefits was $1.1 million and $0.8 million, respectively, all of which would affect the effective tax rate if recognized.
    The Company includes interest and penalties related to income taxes within income tax expense (benefit) on the consolidated statements of operations. For the year ended October 1, 2021, $0.2 million interest and penalties have been included for this period. For the year ended October 2, 2020, $0.1 million interest and penalties have been included for this period. For the year ended September 27, 2019, $0.1 million interest and penalties have been included for this period.
    The Company files U.S. federal and state income tax returns and non-U.S. income tax returns in various jurisdictions. All of these returns are subject to examination by their respective taxing jurisdictions from the date of filing through each applicable statute of limitation period. Other periods for entities acquired are still open and subject to examination. Generally, periods prior to 2011 are no longer subject to examination.
    During fiscal year 2021, the New York Department of Finance and Taxation and the Utah State Tax Commission commenced examinations of Varex’s tax returns for the years 2017, 2018, and 2019. The Swedish Tax Agency will commence an examination of Direct Conversion’s tax returns for the fiscal year 2019 in fiscal year 2022. Although the outcome of tax audits are uncertain, based on currently available information, the Company believes the outcomes will not have a material adverse effect on the Company’s financial position.