Here is a look at what headroom is in audio production and how this is implemented in audio recording.
The audio range that can be used when recording audio and through audio playback is limited not only by the dynamic range of what can be heard or what is considered acceptable. For most equipment there is a range that can be recorded without causing problems to the captured audio. This means that after a certain point the audio will likely distort in some way and will not remain a pure replica of how the audio existed in the real world when heard. This audio distortion will usually happen at a high point, so it is important to figure out and identify the highest point that you have without distorting the audio. This point is called audio headroom.
This audio distortion that happens at these high points is usually called audio clipping. This audio clipping point is usually fairly standard and higher level audio equipment will place this audio headroom point at around 24 decibels. Knowing this audio headroom will give you a general idea of where to your limits are and how to process that sound so as to avoid audio clipping. To avoid the audio clipping you will then have to adjust the sources and equipment so as to not break through the audio headroom range for that recording equipment, which is going to cause an often irreversible series of audio distortions that will be hard to deal with when doing post-production sound.
The standard reference tone that is usually used by recording equipment, often DAT and digital 702 recorders, is at -20 decibels. Since the base zero on a VU meter is going to be + 4 decibels you can subtract that from the 24 decibels that you have in your standard equipment headroom range, giving you a general range of 20 decibels. With a reference tone of -20 decibels you will reach a zero in your recorder by adding in the 20 decibels of available audio headroom.
Transient clipping may be the most pervasive problem with the violation of audio headroom. A transient in terms of clipping is that happens so momentarily that it is not even picked up by the equipment that is meant to show you what is coming in. Since it is hard to deal with these transients you have to observe your audio headroom even more closely than you would normally think. It is not safe to allow the audio go right up to the end of the audio headroom range because it raises the possibility for transients to occur. Instead you may want to see how the audio is coming in and then lower the sound so that the transients actually come in within the audio headroom range. This will make it much easier to deal with during audio post-production.