In this paper, we report on an empirical study and advance a new unit of observational analysis for formative assessment that we call an indicator of a knowledge refinement opportunity or as a shorthand, KRO indicators . We put forth a new framework for conceptualizing the design of formative assessments that builds on the Evidence Centered Design framework but centers identification and analysis of indicators of knowledge refinement opportunities. We illustrate a number of key indicators through empirical examples drawn from video recordings of Kindergarten classroom lessons. (author abstract)