Sony's property perpetual coding & compression system that is used on their Mini Disc and some of their solid state based music players. Works on similar princips to MPEG compression as used in MP3's (see PASC), basically an audio signal is split into 52 bands exponentially (i.e. the higher the frequency the wider the bands), all data that is duplicated inside each band is then removed, all data that the processor thinks the user will not hear due to the masking effect of the ears and all data it thinks is superficial (i.e. silence) is also removed and so on until the data has reached a reduction of 4,83:1 (or 292 kbs for a 16b 44KHz signal). Initial versions of the ATRAC codec were absolutely horrendous, the quality of recordings made by early MiniDisc recorders were much worse than could be archived with a reasonable hi-fi cassette recorder, but improvements in the technology meant that by 1997 (ATRAC v4) or so the technology was becoming much more useful and today's models are quite good. Like all perpetual coding schemes ATRAC has problems with harmonically rich music, quick variations in dynamics and harmonics and the masking/compression artefacts can be irritating to some listeners (since the masking effect varies from person to person). It's not only the version of the codec (currently v6) that matters but also the power of the DSP that performs the work, the more expensive models of MD recorders often have more powerful processing chips and/or use more than one chip for the encoding process.

This definition is in context to Audio Technology. See more contextual defintions for Adaptive TRansform Acoustic Coding.