As I understand it, it measures the pressure, reads the ambient temperature, and tells you what your tyre pressures would be if it was 20 Celsius.
Here's what the handbook says:
"Function A sensor integrated into each tyre measures the air temperature and the air pressure inside the tyre and transmits this information to the control unit. Each sensor has a tripswitch that does not enable transmission of the measured values until the motorcycle has accelerated to about 30 km/h. The display shows "" for each tyre until the tyre-pressure signal is received for the first time. The sensors continue to transmit the measured-value signals for approximately 15 minutes after the motorcycle comes to a stop.
Temperature compensation Tyre pressure is a temperature-sensitive variable: pressure increases as tyre temperature rises and decreases as tyre temperature drops. Tyre temperature depends on ambient temperature, on the style of riding and the duration of the ride.The tyre-pressure readings shown by the multifunction display are temperature-compensated; the reference tyre temperature for these readings is always 20 °C."