M ANAGEMENT S DISCUSSION AND ANALYSIS continued 24 Orbit G arant 2012 annual rep O rt Reconciliation of equity in thousands of dollars As at Explanation June 30 2011 July 1 2010 Equity under Canadian GAAP 103787 89592 Differences with Canadian GAAP decreasing reported equity Business acquisition expenses c 328 Contingent consideration b 116 Total equity under IFRS 103343 89592 Reconciliation of earnings and comprehensive earnings in thousands of dollars For the year ended Explanation June 30 2011 Net earnings and comprehensive earnings under Canadian GAAP 12128 Differences in GAAP decreasing reported earnings Business acquisition expenses c 328 Change in fair value of contingent consideration b 116 Sharebased compensation a 238 Net earnings and comprehensive earnings under IFRS 11446 a Stockbased compensation Canadian GAAP For grants of sharebased awards with graded vesting the total fair value of the award is recognized on a straightline basis over the employment period necessary to vest the award IFRS Each tranche in an award with graded vesting is considered a separate grant with a different vesting date and fair value Eac h grant is accounted for on that basis As a result the Company adjusted its expense for sharebased awards to refect this di fference in recognition for all stock options granted b Business combinations Contingent consideration Canadian GAAP Contingent consideration was recognized as part of the purchase price when they were paid IFRS Contingent consideration is recognized at fair value at the date of the acquisition date The Company has booked a contingent consideration related to the acquisition of 1085820 Ontario Limited Advantage Control Technologies c Business combination Acquisition costs Canadian GAAP The acquisition costs were accounted for as part of the purchase price IFRS The acquisition costs are accounted for as expense in the statement of earnings The Company accounted for in the statement of earnings the acquisition costs related to the acquisitions of 1085820 Ontario Limited Advantage Control Technologies and Morris Drilling Inc Changes in accounting policies In addition to the exemptions and exceptions discussed above the following narratives explain the signifcant differences between the previous Canadian GAAP accounting policies and the current IFRS policies applied by the Company Sharebased compensation Under IFRS when a sharebased payment vests in instalments over a vesting period graded vesting each instalment is acc ounted for as a separate arrangement as compared to Canadian GAAP which gave the choice of treating the instruments as a pool wi th the measurement being determined using the average life of the awards granted