It's actually "near" lossless however one could successfully argue that it's good enough. Check out the wikipedia for details.

That is something you have to enable, if you need to respect some bandwidth restriction.

> The codec optionally permits a "hybrid" coding scheme for applications where average and/or peak compressed data rates must be capped at a constrained level. This involves the dynamic application of a form of "near lossless" coding – but only for those short sections of audio where completely lossless coding cannot respect the bandwidth constraints. Even for those short periods while the "near lossless" coding is active, high-definition audio quality is maintained, retaining audio frequencies up to 20 kHz and a dynamic range of at least 120 dB.