The Key Developmental Assets (KDA) will be used by 2,400 FCA carers by the end of the year.
It has 20 areas that children's lives are measured on. FCA executive director Estella Abraham says the tool covers the five outcomes laid out in the Every Child Matters agenda but involves more detail.
The 20 indicators will help record issues such as whether a carer has contact with the child's school.
"A typical scenario would be if a child who has trouble socialising brings a friend back to the carers home. For this child it could mark a major change in their progress. This tool enables such everyday situations to be recorded," said Abraham
She added that such information would be used to help the carer better support the child, create a more detailed national picture of the role of foster carers and provide evidence of the effectiveness of fostering for commissioners.
"The children are also involved. They can record information and they can take it with them into adulthood," she added.
The tool will be assessed over the next year by FCA foster carers.
Professor Leon Fulcher, a looked-after care consultant involved in developing the tool, added that on average the KDA takes between 30 and 40 minutes each week for carers to record information.
The tool has the support of children's minister Tim Loughton who said: "It is important that providers can show their services can help to maximise the potential of children and young people and really make a difference to their lives."
