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In this paper we propose a new specification and simulation modeling methodology that supports the application of transactional level modeling in the design cycle of hardware/software (HW/SW) systems allowing the exploration and validation of design alternatives at high levels of abstraction. The proposed methodology offers a possibility to unify functional and nonfunctional aspects of the system yielding to a holistic approach in specification modeling and simulation. We provide a general approach in system specification that separates three modeling aspects: a computational model, a language used for the functional specification and simulator semantics and implementation. This enables model reusability, design space exploration and specification relatively independent from HW/SW description languages.