The <avr/sfr_defs.h> file is included by all of the <avr/ioXXXX.h> files, which use macros defined here to make the special function register definitions look like C variables or simple constants, depending on the _SFR_ASM_COMPAT define. Some examples from <avr/iocanxx.h> to show how to define such macros:

#define PORTA   _SFR_IO8(0x02)
#define EEAR    _SFR_IO16(0x21)
#define UDR0    _SFR_MEM8(0xC6)
#define TCNT3   _SFR_MEM16(0x94)
#define CANIDT  _SFR_MEM32(0xF0)


If _SFR_ASM_COMPAT is not defined, C programs can use names like PORTA directly in C expressions (also on the left side of assignment operators) and GCC will do the right thing (use short I/O instructions if possible). The __SFR_OFFSET definition is not used in any way in this case.

Define _SFR_ASM_COMPAT as 1 to make these names work as simple constants (addresses of the I/O registers). This is necessary when included in preprocessed assembler (*.S) source files, so it is done automatically if __ASSEMBLER__ is defined. By default, all addresses are defined as if they were memory addresses (used in lds/sts instructions). To use these addresses in in/out instructions, you must subtract 0x20 from them.

For more backwards compatibility, insert the following at the start of your old assembler source file:

#define __SFR_OFFSET 0


This automatically subtracts 0x20 from I/O space addresses, but it's a hack, so it is recommended to change your source: wrap such addresses in macros defined here, as shown below. After this is done, the __SFR_OFFSET definition is no longer necessary and can be removed.

Real example - this code could be used in a boot loader that is portable between devices with SPMCR at different addresses.

 <avr/iom163.h>: #define SPMCR _SFR_IO8(0x37) <avr/iom128.h>: #define
SPMCR _SFR_MEM8(0x68) 
#if _SFR_IO_REG_P(SPMCR)

You can use the in/out/cbi/sbi/sbic/sbis instructions, without the _SFR_IO_REG_P test, if you know that the register is in the I/O space (as with SREG, for example). If it isn't, the assembler will complain (I/O address out of range 0...0x3f), so this should be fairly safe.
If you do not define __SFR_OFFSET (so it will be 0x20 by default), all special register addresses are defined as memory addresses (so SREG is 0x5f), and (if code size and speed are not important, and you don't like the ugly #if above) you can always use lds/sts to access them. But, this will not work if __SFR_OFFSET != 0x20, so use a different macro (defined only if __SFR_OFFSET == 0x20) for safety:
        sts     _SFR_ADDR(SPMCR), r24

In C programs, all 3 combinations of _SFR_ASM_COMPAT and __SFR_OFFSET are supported - the _SFR_ADDR(SPMCR) macro can be used to get the address of the SPMCR register (0x57 or 0x68 depending on device).