This papers presents an embedded fine grain scalable perceptual and lossless audio coding scheme. The enabling technology for this combined perceptual and lossless audio coding approach is the integer modified discrete cosine transform (IntMDCT), which is an integer approximation of the MDCT based on the lifting scheme. It maintains the perfect reconstruction property and therefore enables efficient lossless coding in the frequency domain. The close approximation of the MDCT also allows us to build a perceptual coding scheme based on the IntMDCT. In this paper a bitsliced arithmetic coding technique is applied to the IntMDCT values. Together with the encoded shape of the masking threshold a perceptually hierarchical bitstream is obtained, containing several stages of perceptual quality and extending to lossless operation when transmitted completely. A concept of encoding subslices is presented in order to obtain a fine adaptation to the masking threshold especially in the range of perceptually transparent quality.