If you mean software decoding, I'm not sure what you have in mind. The more interesting codecs (VP9, Thor, Daala) are too complex to decode in software on such a low power embedded chip.
[0]: https://www.apple.com/tv/specs/ [1]: http://www.streamingmedia.com/Articles/News/Online-Video-New... [2]: http://www.slashgear.com/iphone-66-plus-a8-chip-capable-of-4...
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Things like this have been attempted in the Raspberry Pi community but the last time I checked there was no success.
[0]: https://chrome.google.com/webstore/detail/h264ify/aleakchihd...
Codec wise I wouldn't be surprised if it was only H264, H265, VP8, and MPEG2/4.
I'd give 50/50 on the MPEG2 support though, might be there just because the hardware had it and to ease releases from the DVD era.
It will almost certainly have to be transcoded for the AppleTV.
https://support.plex.tv/hc/en-us/articles/200250387-Streamin...