In this paper an advanced simulation model of interior permanent magnet synchronous machine (IPMSM) is presented. The conventional dq-axis mathematical model is modified in order to include data derived from three-dimensional finite element analysis (FEA). Indirect interaction between FEA and circuit simulation enhances model fidelity embodying the influence of saturation and cross-coupling effects. The evaluation of machine parameters reveals considerable association between self- and cross-coupling inductances in the d- and q- axis. Mathematical model's capability of reproducing precisely the output voltage at the machine terminals, including the existence of n-order harmonic components, is also examined and affirmed by experiments performed on an IPMSM overcoming difficulties derived from the combination of the non-sinusoidal back electromotive force (EMF) and dq-transformation. The proposed method of developing a detailed simulation model opens new prospects on the design of electrical drives.