Nero Burning ROM can encode audio files of an Audio CD in the Nero AAC Audio format.
Set options in the Nero AAC Encoder Settings window that you can open in the Encode Files window via the Settings button. Ensure that you have selected Nero AAC Audio as the Output file format.  
The following setting options are available in the Nero AAC Encoder Settings window:
Drop-down menu entry
Variable Bitrate

Specifies a variable bit rate, i.e. the data flow per unit of time and thus the quantity of the saved data adapts to the dynamics of the audio file. The bit rate, for example, can be lowered at quieter points in the track.
You can set the variable bit rate between 0 and 100. 0 means the lowest, 100 the highest quality.

Drop-down menu entry
Average Bitrate

Specifies an average bit rate, i.e. the data flow per unit of time and thus the quantity of the saved data adapts to the dynamics of the audio file but the average bit rate tends to the defined value. In principle is it a variable bit rate with a limited bit band width and thus combining the advantages of the variable and the constant bitrate.

Drop-down menu entry
Constant Bitrate

Specifies a constant bit rate, i.e. the data flow per unit of time and thus the quantity of the saved data is the same over the entire audio file.

Slider
Quality

Specifies the bit rate, i.e. the data flow per unit of time and thus the quantity of the saved data.
If the bit rate is small, less data is transferred. The file is then small, but quality is lower. If the bit rate is high, more data is transferred. The file size is then large, but the quality is high. The default value of 128 is near CD quality.

Check box
Use .m4a extension for writing files

Encodes the audio files in the M4A audio file format; which was defined by Apple.

 
Nero AAC
Various MPEG-4 video and audio codecs are collated in Nero AAC and are fully compatible with the standard MPEG-4. Nero AG is continuing to develop these. In this way a substantially higher quality of the multi-media data is achieved. Further, additional features such as subtitles have been implemented.

Nero AAC Encoding Options