Altitude

This panel indicates your height above sea level in meters if you set metric system for units of measurement, and feet if imperial.

It works this way:

When APM boots and gets GPS lock, it checks your height above sea level than calibrates you barometric pressure sensor. After this it is using barometric height by default.

But you can change this in APM parameters. You can use only GPS or a mix of both also.

Altitude can be reset to 0 on arming to show relative altitude