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Dementia is a syndrome characterized by cognitive and neuropsychiatric symptoms associated with progressive functional decline (FD). FD is a core diagnostic criterion for dementia, setting the threshold between its prodromal stages and the full-blown disease. The operationalization of FD continues to generate a great deal of controversy. For instance, the threshold of FD for the diagnosis of dementia varies across diagnostic criteria, supporting the need for standardization of this construct. Moreover, there is a need to reconsider how we are measuring FD to set boundaries between normal aging, mild cognitive impairment, and dementia. In this paper, we propose a multidimensional framework that addresses outstanding issues in the assessment of FD: i) What activities of daily living (ADLs) are necessary to sustain an independent living in aging? ii) How to assess FD in individuals with suspected neurocognitive disorders? iii) To whom is the assessment directed? and iv) How much does FD differentiate healthy aging from mild and major neurocognitive disorders? Importantly, the To Whom Question introduces a person-centered approach that regards patients and caregivers as active agents in the assessment process of FD. Thus, once impaired ADLs have been identified, patients can indicate how significant such impairments are for them in daily life. We envisage that this new framework will guide future strategies to enhance functional assessment and treatment of patients with dementia and their caregivers. [ABSTRACT FROM AUTHOR]