A method of encoding multi-channel audio into a lossless variable bit-rate, VBR, audio bitstream, comprising: blocking the multi-channel audio including at least one channel set into frames of equal time duration, each frame including a header and a plurality of segments, each said segment having a duration of one or more analysis blocks; for each successive frame, detecting the existence of a transient in a transient analysis block in the frame for each channel of the channel set; partitioning the frame so that any transient analysis blocks are located within the first L analysis blocks of a segment in their corresponding channels; determining a first set of prediction parameters for segments prior to and not including the transient analysis block and a second set of prediction parameters for segments including and subsequent to the transient analysis block for each channel in the channel set; compressing the audio data using the first and second sets of prediction parameters on the first and second partitions, respectively, to generate residual audio signals; determining a segment duration and entropy coding parameters for each segment from the residual audio samples to reduce a variable sized encoded payload of the frame subject to constraints that each segment must be fully and losslessly decodable, have a duration less than the frame duration and have an encoded segment payload less than a maximum number of bytes less than the frame size; packing header information including segment duration, transient parameters indicating the existence and location of the transient, prediction parameters, entropy coding parameters and bitstream navigation data into the frame header in the bitstream; and packing the compressed and entropy coded audio data for each segment into the frame segments in the bitstream. blocking the multi-channel audio including at least one channel set into frames of equal time duration, each frame including a header and a plurality of segments, each said segment having a duration of one or more analysis blocks; for each successive frame, detecting the existence of a transient in a transient analysis block in the frame for each channel of the channel set; partitioning the frame so that any transient analysis blocks are located within the first L analysis blocks of a segment in their corresponding channels; determining a first set of prediction parameters for segments prior to and not including the transient analysis block and a second set of prediction parameters for segments including and subsequent to the transient analysis block for each channel in the channel set; compressing the audio data using the first and second sets of prediction parameters on the first and second partitions, respectively, to generate residual audio signals; determining a segment duration and entropy coding parameters for each segment from the residual audio samples to reduce a variable sized encoded payload of the frame subject to constraints that each segment must be fully and losslessly decodable, have a duration less than the frame duration and have an encoded segment payload less than a maximum number of bytes less than the frame size; packing header information including segment duration, transient parameters indicating the existence and location of the transient, prediction parameters, entropy coding parameters and bitstream navigation data into the frame header in the bitstream; and packing the compressed and entropy coded audio data for each segment into the frame segments in the bitstream. detecting the existence of a transient in a transient analysis block in the frame for each channel of the channel set; partitioning the frame so that any transient analysis blocks are located within the first L analysis blocks of a segment in their corresponding channels; determining a first set of prediction parameters for segments prior to and not including the transient analysis block and a second set of prediction parameters for segments including and subsequent to the transient analysis block for each channel in the channel set; compressing the audio data using the first and second sets of prediction parameters on the first and second partitions, respectively, to generate residual audio signals; determining a segment duration and entropy coding parameters for each segment from the residual audio samples to reduce a variable sized encoded payload of the frame subject to constraints that each segment must be fully and losslessly decodable, have a duration less than the frame duration and have an encoded segment payload less than a maximum number of bytes less than the frame size; packing header information including segment duration, transient parameters indicating the existence and location of the transient, prediction parameters, entropy coding parameters and bitstream navigation data into the frame header in the bitstream; and packing the compressed and entropy coded audio data for each segment into the frame segments in the bitstream.