Purpose: The original version of the Direct Assessment of Functional Status (DAFS), a measure of instrumental activities of daily living (IADLs), was found to have a ceiling effect in older adults living independently in the community. This suggested that the tasks measured, although relevant, do not require full use of this population's abilities, and thus, the instrument may not be sensitive to the early decrements in IADLs that can signal initial cognitive impairment and may not detect improvements in IADLs over time, which is especially important in intervention research. Design and Methods: By removing items with little to no variation and adding more difficult subscales that emphasized medication management skills, we designed the DAFS-Extended (Direct Assessment of Functional Status-Revised [DAFS-R]) to be more challenging for elders living independently. Results: Analysis with a sample of 45 older adults suggested that scores on the DAFS-R appear to be more normally distributed than on the original version. The DAFS was able to differentiate individuals with varying standard profile scores on the Rivermead Behavioural Memory Test memory performance instrument (normal, poor, and impaired). In addition, the reliability and validity of the DAFS-R were supported in this sample. Implications: Given the large number of older adults who regularly take multiple prescription medications, deficits in medication management skills can have serious consequences. A performance measure that emphasizes these higher level daily living skills can help providers screen for initial signs of functional decline.