Horizontal direction is judged by the tiny difference in arrival time between the two ears, as in most animals. The barn owl adds vertical resolution by placing the ear openings asymmetrically, one higher than the other and angled differently, so elevation maps onto a difference in loudness between the ears.
The stiff facial disc funnels sound toward the openings, working as a parabolic collector. Laboratory work by Roger Payne and later by Masakazu Konishi and colleagues showed captive barn owls striking live prey in a light-tight room using hearing alone, and mapped the neural circuit in the midbrain that combines timing and intensity cues into a map of auditory space.
Two details are frequently muddled. Ear asymmetry is not universal among owls; several genera have symmetrical ears. And silent flight, achieved by a comb-like leading edge and soft feather fringes, serves the owl's own listening at least as much as it conceals it from prey.