IP is a logical addressing method as compared to MAC layer physical addresses. It operates at the Network Layer (Layer 3) of the OSI model.
An address mask is used to identify the network and host portions of the address. It is 32-bits long, the same length as an IPv4 address. In general, an address mask is assigned to a network or an organization. The organization then subnets that address mask into per data-link subnet masks for assignment.
The number of available subnets under a major address mask and the number of hosts on each subnet are both calculated with the same formula 2^n-2.