What is Unwinding of Discount interest Expenses

Before learning its whole, learn first 

Unwinding : It means relax after periodical tension. There is no movement in it. Its also meaning is undo. 

Discount is useful to show the current value of future liability of interest expenses which is based on discount rate. For example Rs. 50000 a Interest expenses which we have to pay At the end of 5 year, its Rs. 500000

Now its today value is calculated on the basis of discount rate. If discount rate is 10%, then Rs. 3,10,460

 (500000/(1.1)^10) = Rs. 3,10,460

Now this We can calculate easily first year 

310460*110% = 341506

Unwinding first year Discount = 341506

- 310460 = 31046

If you want to calculate net cash inflow from operating activity, we have to add from total cash inflow from operating activity ( Which is net profit )  like adding depreciation and provision for anything which we have already deducting in profit and loss account. 

Example