Indexing CD collection on Pulse 2i

Hello,
I have ripped our CD collection using EAR into FLAC format. Most albums are stored in "Artist" -> "Album"   directory structure, although a few have one or two extra levels. This is especially where there are collections of CDs.

I can see the folder structure well, in the app, but the Album structure is somewhat of a mystery to me.

So, I am looking for an explanation of how the indexing process decides what is an album and what songs belongs to an album, as this does not always seem to correspond with the folder structure.