ITunes 12 has no option to create AAC version

iTunes 12.0.1.26
iOS 8.0.2 (12A405) on associated iPhone 5S
Win7 Home Prem SP1
Core i7-4700MQ 4xcore CPU @ 2.4 GHz
129 GiB free on bootable C partition (SSD); 509 GiB free on data partition (conventional magnetic HDD)
I make original ringtones. I just created a new one, imported it to my iTunes library first as an mp3, then as a wav file. When I right-click the associated file in either its mp3 version or wav version, the "Create AAC Version" selection in the context menu no longer appears, not even as a greyed out item, even though "Create MP3 Version" does appear.
Are .m4r files still the native ringtone format for iOS 8? Has the procedure for creating ringtones changed?

In Preferences (CTRL + ,), in the General tab, click on Import Settings...
You need to select AAC Encoder in the Import Using drop down menu.
Now Create AAC Version should appear in your right-click context menu.

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