A video decoder, encoder, and corresponding methods for processing video signal data for an image block with two reference picture indices to predict the image block are disclosed that utilize implicit weighting of reference pictures to enhance video compression, where a decoder includes an implicit reference picture weighting factor unit for determining a weighting factor corresponding to each reference picture index; an encoder includes an implicit reference picture weighting factor assignor for assigning a weighting factor corresponding to each reference picture index; and a method for decoding includes receiving the reference picture indices with the data that corresponds to the image block, determining an implicit weighting factor responsive to the relative positioning of the image block and the reference pictures indicated by each reference picture index, retrieving a reference picture for each index, motion compensating the retrieved reference pictures, and multiplying the motion compensated reference pictures by the corresponding weighting factor to form weighted motion compensated reference pictures.