The phrase can also have a metaphorical sense in the case of real altercation: you may not have been literally knocked back onto your posterior, but you were still physically overwhelmed or roughly treated.
"Ass" is the American corruption of the English word "arse", which is still the common form of that word in BE.
Used literally, the phrase means that he knocked you down so that your buttocks hit the ground.
John wasn't looking where he was going when he came around that corner. He ran right into me, and knocked me flat on my ass.
Used figuratively, it means that what he did so surprised or shocked or impressed or startled you, that you might be expected to have such a reaction.
I had no idea that Tony could speak any language besides English, but when he started speaking to Mr. Patel in Hindi, and then turned to Mr. Wong and repeated the conversation in Cantonese, he just knocked me flat on my ass!