How exactly does armour function?

At first I thought armour gives a %-based damage reduction, but that doesn't seem to be the case because multiple successive attacks will punch through even 100 armour. I tested this by giving basic armour 100 armour against all damage types and sent a soldier into a UFO. He fully resisted the first few volleys but then started taking what seems like normal damage.

I assume armour somehow degrades when taking hits, but is it only when taking multiple hits during the same round or does the effect persist through the whole mission? Does armour simply absorb damage equal to the armour value and then become useless or is there a more complicated damage reduction formula? So many questions, so few answers.

It absorbs damage equal to the armor value, the armor value is then reduced by a percentage of the damage absorbed. This reduction lasts for the rest of the mission, and I believe it is around 20 or 30% I forget the actual value.

The value of the target's armour is subtracted from the damage roll of the attack. The target's armour is then reduced by 20% of the damage which was absorbed by the armour for the rest of the mission.

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E.g.:

A soldier with 45 armour is hit for 20 damage. The attack does nothing (20-45=0) and the soldier's armour is depleted by 4 points to 41 (20*20% = 4; 45-4=1).

Another soldier with 45 armour is hit for 60 damage. The attack does 15 damage to the soldier (60-45=15) and the soldier's armour is depleted by 9 points to 36 (45*20%=9; 45-9=36).

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Weapons with armour mitigation reduce the target's armour value before any of these calculations. Also, armour is only damaged relative to the type of damage it resisted. For example, a soldier who has been shot an energy damage-type weapon will have their energy armour reduced but not their kinetic, chemical or incendiary armour. In practice, this final point rarely matters much if at all but it's worth noting nevertheless.

(Vehicles are slightly different in that they have locational armour: front, side and rear. Damage to armour in one location has no bearing on armour in the other locations, so sometimes it might be advantageous to have a tank face in a different direction to the enemy if it has already taken some hits).

(Also I might be wrong about the 20% armour reduction value; it might be 25% instead).

EDIT: Ninja'd; I write too much.

This game has resistances. So if you got 100 resistance for kinetic at your armour. An enemy shoot u for 100. It will absorb all but the armour will lose the damages %20.. so ur resist will be 80. If u take another bullet for 100 damage, ur soldier will take 20 damage and your resist will lower as the absorbed 80 dmg %20 so 16 and new resist will be 64.. this %20 can change at config.xml . I hope I could explain with my bad English.

Thanks for the explanations, guys. I now understand how it works.