Increasing recognition of a broadened concept of literacy challenges policy-makers and practitioners to re-define literacy operationally, develop and apply appropriate methods of assessing literacy and consider and act upon the consequent policy implications. This task is given a new urgency by the call of the Belem Framework for Action to "recognise literacy as a continuum" in the framework of lifelong learning; and to develop "appropriate assessment methods and instruments" in surveys and collection of data. This paper reviews the evolution of the concept of literacy and the emerging new consensus about it. It examines the initial experience of the Literacy Assessment and Monitoring Programme (LAMP) of the UNESCO Institute for Statistics as a methodology in assessing literacy and the potential of "simpler" alternatives, taking the Education Watch survey in Bangladesh as an example. The policy implications for literacy programmes of the broadened definition and a new assessment approach are noted.