Read the screenplay carefully. Take notes about what happens in each scene. Change scenes around, if necessary, to form the story that you want to tell in the novel. You may need to delete or, in some cases, add some scenes in your adaptation.
Develop the interior thoughts of the characters. Inner dialogue not presented in a screenplay needs to be fleshed out in the adaptation. In essence, you must re-imagine each scene while taking the character's motivations into account.
Fill in the blanks. In a screenplay, one scene may end in a bar and the next may begin with the same characters in a park. In a novel, you will have to take the characters from the bar to the park.
Keep as much of the dialogue intact as possible. This may take some restructuring of the storyline so the dialogue remains as is.
Provide some background. In a novel, you can show events that happened earlier, while in a screenplay this can only be referred to. Events happen quickly onscreen; in your adaptation, you must slow down the pace and explain more.