Recent research has highlighted the lack of a uniform definition of formative assessment, although its effectiveness is widely acknowledged. This paper addresses the theoretical differences and similarities amongst three approaches to formative assessment that are currently most frequently discussed in educational research literature: data-based decision making (DBDM), Assessment for Learning (AfL) and diagnostic testing (DT). Furthermore, the differences and similarities in the implementation of each approach were explored. This analysis shows that although differences exist amongst the theoretical underpinnings of DBDM, AfL and DT, the combination of these approaches can create more informed learning environments. The thoughtful integration of the three assessment approaches should lead to more valid formative decisions, if a range of evidence about student learning is used to continuously optimise student learning.