AAC, Advanced Audio Coding, is a technique for compressing digital audio files. Officially part of the MPEG-4 standard, it is most widely used to create small digital audio files.
AAC is conceptually similar to the ubiquitous MP3 format. AAC is a lossy algorithm, meaning the original digital audio cannot be recreated from the compressed bits alone. In terms of audio fidelity, however, there is no loss of data if the compressed audio is properly encoded. AAC claims an advantage over MP3 in this regard: while MP3 requires a bit rate of approximately 256 kilobits per second (kbps) to achieve transparency, AAC can achieve the same quality at 128 kbps. This allows AAC files to be roughly half the size of MP3 files of the same quality, and one-tenth the size of CD digital data.
AAC provides several other advantages over MP3. It is capable of handling much higher and lower frequencies of sound, provides up to 48 channels of audio, and allows the creation of low-latency audio necessary for two-way communication.