diff --git a/NEWS.md b/NEWS.md
index 34c9a86e56..2dff9806c6 100644
--- a/NEWS.md
+++ b/NEWS.md
@@ -9,6 +9,7 @@
 - Replace use of `data("sdtm")` with `sdtm <- pharmaverse::sdtm` in templates and vignettes. (#2498)
 
 - Remove `dthcaus_source()` calls in `ADSL` template because they are deprecated. (#2517)
+- Update `ADEG` template to flag `ABLFL` and `ANL01FL` based on `DTYPE == "AVERAGE"` records. (#2561)
 
 ## Updates of Existing Functions
 
diff --git a/inst/templates/ad_adeg.R b/inst/templates/ad_adeg.R
index fe6f58914d..3be5b8bdc1 100644
--- a/inst/templates/ad_adeg.R
+++ b/inst/templates/ad_adeg.R
@@ -210,10 +210,7 @@ adeg <- adeg %>%
   # Calculate BASETYPE
   derive_basetype_records(
     basetypes = exprs(
-      "LAST: AFTER LYING DOWN FOR 5 MINUTES" = ATPTN == 815,
-      "LAST: AFTER STANDING FOR 1 MINUTE" = ATPTN == 816,
-      "LAST: AFTER STANDING FOR 3 MINUTES" = ATPTN == 817,
-      "LAST" = is.na(ATPTN)
+      "BASELINE DAY 1" = TRUE
     )
   ) %>%
   # Calculate ABLFL
@@ -226,7 +223,7 @@ adeg <- adeg %>%
       mode = "last"
     ),
     filter = ((!is.na(AVAL) | !is.na(AVALC)) &
-      ADT <= TRTSDT & !is.na(BASETYPE) & is.na(DTYPE) &
+      ADT <= TRTSDT & !is.na(BASETYPE) & DTYPE == "AVERAGE" &
       PARAMCD != "EGINTP"
     )
   )
@@ -274,7 +271,7 @@ adeg <- adeg %>%
       new_var = ANL01FL,
       mode = "last"
     ),
-    filter = !is.na(AVISITN) & ONTRTFL == "Y"
+    filter = !is.na(AVISITN) & (ONTRTFL == "Y" | ABLFL == "Y") & DTYPE == "AVERAGE"
   )
 
 ## Get treatment information ----