everything that isn't used up or destroyed gets recovered, whether on the soldier or the ground, assuming you are successful in the mission. electro flares never get "used up" but they can be destroyed in explosions. if a prox grenade does not detonate, it will be recovered. ammunition is recovered as the total number of rounds remaining in all clips recovered, divided by the size of the clip itself. so assuming you have 10 rifle clips, with 2 bullets spent each, you would get 9 clips back (rather than the 0 you would get in vanilla)
or, to express it numerically: (10 * (20 - 2)) / 20 = 180 / 20 = 9