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The 12 in that is the approximate kg of the item. the 25 is pounds. As for a way to come up with whether it's light, medium, or heavy encumbrance, not sure on that one; however, that, IIRC, is the "additional bulk" it mentions in the section, and I think it's more subjective based on how unwieldy the item actually is. Plate mail is terribly bulky and difficult to move in, and the range of movement is hampered. Leather armor, by comparison is light encumbrance. Still bulky to wear, but the range of motion and weight isn't near as bad. You can usually use other items as a judge as to how bulky another item might be.

If you've got an item that's 20 lb that you're converting, consider it as 20/10 (20 pounds, or 10 kg.)  Unless it's something that's typically carried around everywhere and hampers movement, like armor, there's usually no automatic light, medium, or heavy addition.  It's usually just adding the weight of what's being carried based off how much weight the character can carry, as written in the EV section.