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This paper presents a novel B-picture coding based on block-wise adaptive motion accuracy (BAMA) with low-complexity motion compensation (MC). BAMA is able to adaptively select the motion accuracy for each inter-block in a B-picture depending on whether it is of bidirectional prediction, in which compared to the unidirectionally predicted block, lower motion accuracy is applied to the bidirectionally predicted block to reduce MC complexity. To further reduce MC complexity for the bidirectionally predicted luminance block with subpixel motion vectors in both directions, the forward and backward MC interpolations are merged according to the linear operation property of MC interpolation. In addition, a simplified MC interpolation method is also introduced for chrominance components for the bidirectionally predicted block. When integrating the proposed methods into H.264/AVC reference software, the experimental results demonstrate that they can significantly reduce MC complexity for a B-picture while yielding the comparable rate distortion performance in comparison with H.264/AVC although they no longer generate H.264/AVC compliant bitstream.