compute AUC metric for Matrix Factorization output

Question

Initial Matrix contains 1 for known links (0 for unknown and missed entries) in a link prediction system. Outputs of Matrix Factorization are predicted values for missed entries to calculate AUC:

1. Hide 20% of known links (set 20% of entries with 1 to 0 in the matrix )
2. Sort output of Factorization and discard indexes used for train (80% of 1)
3. Set N to number of hided values
4. Get N top predicted values and check if they are hided values (class label set to 1) or not (class label set to 0)
5. Compute AUC using N top predictions

I know perfcurve in matlab computes AUC, but I need to be sure about the above process to provide labelled data for perfcurve.

Any comment is really appreciated.