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1. Haute Couture Fashion Berhad HCF, listed in Bursa Malaysia, decided to expand operation to China, and maintain current factories operations to create own brand
1. Haute Couture Fashion Berhad HCF, listed in Bursa Malaysia, decided to expand operation to China, and maintain current factories operations to create own brand name to ensure the long-term survival of Haute Couture Fashion Berhad. The Board of Director is calling a Board of Director meeting for discussion of a Joint Venture arrangement to expand operation to China, based on profit sharing of 70% Celestial Clothes and 30% Haute Couture Fashion Berhad via a New Entity. a) Discuss four (4) strengths for Haute Couture Fashion Berhad to negotiate with Celestial Clothes to have 50%:50% profit sharing in this New Entity? [4 marks] b) If they can achieve 50%:50% profit sharing agreement, what are the strategic plans for HCF to make consolidation to increase group revenue under IFRS 10 or IFRS 11? [6 marks]
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