Bulk power transfer by a vast expanded electrical power transmission network demands robustness and ability to withstand both internal and external adverse conditions that maybe experienced by the power transmission network. Therefore, the insulation of equipment, to be used in the power system, should be reliable enough to withstand these adverse conditions. To gauge the strength of the insulation used in power equipment or to understand the reasons of its failure, mathematical calculations are carried out to determine the transfer function of power equipment, which can be used for diagnosis in case of malfunctioning. Various factors affecting the testing setup and power equipment are taken into consideration. The results of mathematical calculations are compared with OrCAD PSpice & Wolfram Mathematica simulations to verify the integrity of mathematical technique proposed to determine the transfer function of a given power equipment. Transformer is used as power equipment in this research for the development technique for determination of transfer function.