Encoder, decoder, encoding method, and decoding method

A decoder that decodes a coded stream to generate a picture, the decoder comprising:

• circuitry;
• and
• memory coupled to the circuitry,
• wherein the circuitry, in operation:
• generates a first prediction image of a current block included in a current picture by referring to a first region included in a reference picture different from the current picture;
• operates a bi-directional optical flow process to generate a second prediction image based on the first prediction image by referring to a second region entirely included in the first region, the bi-directional optical flow process being performed without applying local illumination compensation;
• and
• decodes the current block based on the second prediction image.

A bitstream transmitting apparatus, comprising:

• circuitry;
• and
• memory coupled to the circuitry,
• wherein the circuitry, in operation:
• transmits a bitstream generated by performing an encoding method, the encoding method including:
• generating a first prediction image of a current block included in a current picture by referring to a first region included in a reference picture different from the current picture;
• operating a bi-directional optical flow process to generate a second prediction image based on the first prediction image by referring to a second region entirely included in the first region, the bi-directional optical flow process being performed without applying local illumination compensation;
• and
• encoding the current block based on the second prediction image.