Battery Detector?

[chesskin]

I am new in electronic.. recently, i saw my friend's project with a interesting stuff - his digital compass with a lcd module that have a function to show the energy remained in the battery!! i wanna ask that, it functions as a battery detector... the main part to do so is in software or hardware? can anyone explain the principles ..? How can it operate?

 

[Sceadwian]

Both. You need to test the batteries output voltage when it's under load. If the load is known a curve can be plotted with the voltage that indicates the charge state of the battery. This curve is NOT linear.