[2][3] (In an Airbus aircraft, if de-rated takeoff power is desired, the thrust levers are instead advanced to the FLX/MCT detent.)
Flight management computers on modern aircraft determine the amount of power needed by the engines in order to reach takeoff speed; a number of factors have to be taken into account, including runway length, wind speed, altitude, temperature, humidity, and most importantly the weight of the aircraft.
The advantage of having such a system is the ability to reduce wear and tear on the engines by using only as much power as is actually required to ensure the aircraft reaches a safe takeoff speed.
If a pilot finds that they are unable to land safely, or deems it necessary to go around for any reason, activating this switch (usually positioned on the back of the throttle levers) will increase the power to go-around thrust.
On Airbus aircraft, it does not disengage the autopilot but causes it to stop following the ILS and to perform the go-around maneuver automatically.