Whenever a power or distribution transformer is isolated from the power system, it is very likely that residual magnetism remains in the core. Residual magnetism also occurs when performing winding resistance test which is also a routine test of the transformer manufacturers and onsite test. This paper discusses the influence of residual magnetism on some diagnostic measurement methods and on the inrush current. It also describes how to overcome the difculties of demagnetisation onsite with a mobile test equipment