The purpose of this chapter is to sketch in broad-brush terms a number of major challenges associated with assessing the impact of foreign aid in the social sector. Within this context the chapter provides a critical analysis of issues concerning Impact Assessment from a range of vantage points. It provides an overview of results and impact as a component of a project cycle and, for a better understanding of issues concerned, focuses on the evolution of Impact Assessment, as it is relevant to the international development context. From the basis of historical development of Impact Assessment the chapter addresses its underpinning theories and practices in a contemporary context. This includes issues concerning Theory of Change and critical discussions about notions of Transparency and Accountability as well as Ex-Ante and Ex-post Impact Assessment.