In a 24 hour period your pp is recorded then added up with pp from other days then divided by number of days
If you are offline for a certain period of time it pauses the average system.
for example:
329
190
600
+ 10
----------------
1129
329 is pp from oneday
190 is from another
600 another
10 and so on
then :
1129
4
= 282.25
1129 is the total
4 is the amount of days
Finally:
282.25 will be displayed in your profile
there can also be average per year per month or whatever
feel free to comment and help better this idea
Thank you,
Nakuyoko