Balance calls upon contributions from vision, peripheral sensation, vestibular sense, muscle strength, neuromuscular control and reaction time. With increased age, there is a progressive loss of functioning of these systems and an increased likelihood of falls. Falls can mark the beginning of a decline in function and independence and are the leading cause of injury-related hospitalisation in older people. By using simple tests of vision, leg sensation, muscle strength, reaction time and standing balance, it is possible to identify accurately older people at risk of falls and assess intervention outcomes. This approach overcomes the limitations associated with traditional methods of assessing falls risk via medical diagnoses, including varied severity between individuals. Using a physiological approach provides information at the impairment and functional capacity levels to assist in understanding falls and developing and evaluating optimal falls prevention strategies for older people.