Methods and systems encoding a stereo audio signal having an original left channel and an original right channel are disclosed. The method includes generating a downmix signal and a residual signal based on the stereo audio signal and determining one or more stereo parameters based on the stereo audio signal. The residual signal covers only a part of an audio frequency range of the stereo signal, and the one or more stereo parameters describing a stereo image of the stereo audio signal. The method further includes analyzing the stereo audio signal and selecting, based on the analyzing, left/right perceptual encoding or mid/side perceptual encoding in a time variant manner.