Flac - Jun 2010 - FLAC encoder

Hi,
  In FLAC encoder how the decision of encoding a frame in particular
mode (verbatim,constant,fixed,LPC) is made? Do standard specify the
algorithm for making such decision or is it upto implementer to come
up with its own algoritm?

Kindly point me to FLAC encoder doc/codebase from where I can infer
all these details.

Thanks and Regards,
     Nawal Mishra