Ideal transformer is an imaginary transformer devised for sake of analysis of a practical/real transformer. The main difference between an ideal and practical transformer is that former is having an efficiency of 100% while the latter have efficiency close to 100% (around 99%).

Let us now discuss some more differences between ideal and practical transformer. Any machine in the world has some losses in it. Therefore, a practical transformer should also have losses. Yes, it is having core loss and ohmic loss (I^{2}R) and hence efficiency is less than 100%. While defining an ideal transformer, all kind of losses are assumed absent and hence efficiency is 100%.

Primary and secondary winding of real transformer have winding resistance (though it is very less) but the ideal one has no such winding resistance. Due to presence of winding resistance, ohmic loss take place in the primary & secondary winding of real transformer.

As we know that, the magnetic flux in the transformer core is set up by the primary current. All the flux created by the primary does not link with the secondary rather some is leaked outside the core. However, this leakage of flux is considered zero in case of ideal transformer. Due to leakage flux, a leakage reactance comes into existence in the practical transformer while the same is zero for ideal.

Magnetization curve or B-H curve of transformer core is never linear rather it becomes flat as the value of magnetizing current increases. This mean, transformer exciting current will not be in phase with the core flux. In fact, exciting current leads the core flux by some angle “α”. This angle is known as Hysteretic Angle. This angle is dependent on the hysteresis loop of the core material.

However, in an ideal transformer, magnetization curve is assumed to be linear. This means, magnetizing current and core flux are in phase.

Carefully observe the phasor diagram of practical and ideal transformer. It is clear that, in practical/real transformer, the exciting current (current in primary winding under no load condition) drawn from the source is composed of magnetizing current (I_{m}) and core loss component (I_{c}). This is because, core loss is supplied by the primary source only. However, in an Ideal Transformer, as there is no core loss, the exciting current is equal to magnetizing current.

While designing a practical transformer, effort is made to reduce the losses, minimize the leakage flux, minimize the winding resistance. All these efforts tend to bring the practical transformer close to an Ideal Transformer. It should also be noted at this point that, formula for transformation ratio derived considering an Ideal Transformer is also valid for a practical transformer. Transformation Ratio of Ideal as well as practical transformer is given below.