Splicing is the fundamental technique used to insert commercials or short programs in channels, for editing audio/video content in post-production houses, and for channel switching in headends and other broadcast stations. Splicing is currently used in US Cable networks for digital ad-insertion based on MPEG-2 video [3], SCTE and ITU-T standards [4] and there are plans to migrate these applications and develop associated standards based on the emerging H.264/AVC video [1] in the near future. In these new applications, the splicing equipment (or function) combines two independently encoded AVC streams and is expected to produce a stream for receiving equipment that conforms to both AVC Video [1] and MPEG-2 Systems [2]. To achieve significantly higher compression efficiency than that of MPEG-2 video while providing same or better quality video, AVC compression standard has introduced several new tools, reference picture structures and enhanced MPEG-2 tools all of which can be used adaptively based on the nature of the content. All these make AVC more complex compared to prior compression schemes in addition to being not backward compatible with MPEG-2 video. Many of the Standards Development Organizations (SDOs) such as DVB/ETSI, SCTE, DVD and ARIB have completed the specifications related to the adoption of AVC in broadcast, VOD and PVR applications. This paper outlines issues related to splicing between two independently coded AVC streams for local Ad-insertion applications and proposes schemes for generating an AVC Video [1] and MPEG-2 Systems [2] conformant output by such splicing equipment so that a seamless or near-seamless splicing can be achieved.