Resistances are reduced by certain skills as well as the difficulty penalty. The final resistance is calculated as follows:

1. Sum up resistances from all sources
2. Apply all reduction effects, except Cold Mastery --> subtract their effects from the result
3. Apply cold mastery --> multiply the result by 1 - Cold Mastery % / 100 and round down (only with cold resistance)
4. Apply difficulty penalty --> subract the penalty from the result
5. Apply lower and upper limits

For example, with cold resistance, you have to take all these effects into account. Its formula is as follows:

Total Cold Resistance = [(Sum of Cold Resistances - Sum of Cold Resistance Reduction Effects) * (1 - Cold Mastery % / 100)] - Difficulty Penalty

In this formula, difficulty penalty is 40 for nightmare difficulty and 100 for hell difficulty. The values of reduction effects are entered as positive values into the sum. [] indicates rounding down. Then, to deterimine the final cold resistance, you apply the lower and upper limits to the total cold resistance.
[c] tgustafs