The Assessment Reform Group defines it as: "The process of seeking and interpreting evidence for use by learners and their teachers to decide where the learners are in their learning, where they need to go, and how best to get there."
In the classroom this evidence can come from sources such as "rich" questions and discussions that illustrate pupils' understanding; their evaluations of their own and others' work; and information from classwork and homework.
This evidence indicates "what" a learner can do and is the basis for asking questions about the "how" and "why", thus providing clues to the next steps in learning.
Teachers help learners identify the next learning step and provide sufficient information to encourage them to take it.
This is something marks, levels and grades cannot do as they do not provide the detail needed for learners to know how to improve - and can even discourage learners from trying to improve.