Advanced Audio Coding. A compressed, lossy, perceptual coding scheme, originally a component of the MPEG-2 standard as MPEG-2 AAC. Defined in 1997 as part of ISO/IEC 13818-7. Enhanced for the MPEG-4 standard as MPEG-4 AAC. MPEG-2 AAC provides better perceived audio quality at the same bit rate compared to MPEG-1, layer 3 ( MP3), according to results published in ISO/IEC JTC1/SC29/WG11, N2006 (February 1998). MPEG-4 AAC extends MPEG-2 AAC with additional coding tools. See also lossy compression.