The main objective of the proposed work is to introduce a new concept of advanced power quality assessment. The introduced system is implemented using applications of a set of powerful software algorithms and a digital signal processor based hardware data acquisition system. The suggested scheme is mainly to construct a system for real time detection and identification of different types of power quality disturbances that produce a sudden change in the power quality levels. Moreover, a new mitigation technique through generating feedback correction signals for disturbance compensation is addressed. The performance of the suggested system is tested and verified through real test examples. The obtained results reveal that, the introduced system detects fast and accurately most of the power quality disturbance events and introduces new indicative factors estimating the performance of any supply system subjected to a set number of disturbance events.