We agree with the Board's objective in this phase of the IASB project to replace IAS 39 Financial Instruments: Recognition and Measurement (IAS 39) to address weaknesses of the incurred loss model in IAS 39 that were highlighted during the global financial crisis. An impairment loss model that focuses on an assessment of recoverable cash flows reflecting all current information about the borrower's ability to repay would be an improvement on the current approach in IAS 39 which relies on identification of trigger events and often leads to a delay in loss recognition. However, we have concerns about the specific requirements proposed by the IASB, in particular those to determine, and allocate, the initial estimate of expected credit losses on a financial asset and to use a probability-weighted outcome approach. We believe that this approach will in many cases be unnecessarily complex. Further, the incorporation of potential future economic environments in estimating recoverable cash flows would be extremely complex, costly and burdensome to apply by preparers. The requirement in the ED to forecast future economic environments and events without providing sufficient guidance with respect to the level of objectivity, verifiability, or support for the underpinnings of these inputs presents significant challenges to internal auditors, external auditors, and regulators. Overall, we believe that the measurement principle would not be operational if the Board were to adopt the ED in its current form.