Relationship between electric field at aperture and field at distance
Once a proper EM wave is formed by an antenna, the power density (watts per square metre) reduces with distance squared. Hopefully this can be seen but if not, think about the conceptual isotropic antenna - it takes in a signal power from the feed wires and emits that power equally in all directions. This is just like a light bulb emitting approximately equally in all directions and, if you measured the light power passing through a fixed area at some distance you would find the light power measured falls with distance squared.

Given that the power density is simply the electric field (volts/m) multiplied by the magnetic field (amps per metre) either of these terms reduces linearly with distance so, it's not surprising to see this formula.

The "A" bit refers to the effective aperture of any antenna. If an antenna is to liberate "watts" from "watts per sq metre" then it must have an effective area so that it can "net" the power. For any antenna this is: -



Where lambda is wavelength and G is antenna gain. An isotropic antenna has G set to 1. Also note that an isotropic antenna is just a mathematical concept for comparing performances of different antennas.