Assessing competence is a tremendous challenge in medical education. There are two contrasting approaches in competence assessment: an analytic approach that aims to precisely measure observable constituents and facets of competence and a holistic approach that focuses on a comprehensive assessment of competences in complex real situations reflecting actual performance. We would like to contribute to the existing discourse about medical competence and its assessment by proposing an approach that can provide orientation for the development of competence-based assessment concepts in undergraduate and postgraduate medical education. The approach follows Kane's framework of an "argument-based approach" to validity and is based on insights into task complexity, testing and learning theories as well as the importance of the learning environment. It describes a continuum from analytic to holistic approaches to assess the constituents and facets of competence to performance. We conclude that the complexity of a task should determine the selection of the assessment and suggest to use this approach to reorganize and adapt competence assessment.