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Scalable video coding (SVC) enables low complexity adaptation of compressed video, providing an efficient solution for content delivery through heterogeneous networks and to diverse displays. However, legacy video and most commercially available content capturing devices use conventional nonscalable coding, e.g., H.264/AVC. This paper proposes an efficient transcoder from H.264/AVC to a wavelet-based SVC. It aims at exploiting the advantages offered by fine granularity SVC technology when dealing with conventional coders and legacy video. The proposed transcoder was developed to cope with important functionalities of H.264/AVC, such as flexible reference frame (RF) selection. It is able to work with different coding configurations of H.264/AVC, including IPP or IBBP with multiple RFs. Moreover, many of the techniques presented in this paper are generic in the sense that they can be used for transcoding with many popular wavelet-based and hybrid-based video coding architectures. To reduce the transcoder's complexity, motion information and residual data extracted from a compressed H.264/AVC stream are exploited. Experimental results show a very good performance of the proposed transcoder in terms of decoded video quality and system complexity.