diff --git a/compiler/light-classes/src/org/jetbrains/kotlin/asJava/elements/lightAnnotations.kt b/compiler/light-classes/src/org/jetbrains/kotlin/asJava/elements/lightAnnotations.kt
index 375de8e1639..35879ee7cac 100644
--- a/compiler/light-classes/src/org/jetbrains/kotlin/asJava/elements/lightAnnotations.kt
+++ b/compiler/light-classes/src/org/jetbrains/kotlin/asJava/elements/lightAnnotations.kt
@@ -95,12 +95,11 @@ class KtLightAnnotationForSourceEntry(
         override fun getReferences() = originalExpression?.references.orEmpty()
         override fun getLanguage() = KotlinLanguage.INSTANCE
         override fun getNavigationElement() = originalExpression
-        override fun isPhysical(): Boolean = false
+        override fun isPhysical(): Boolean = originalExpression?.containingFile == kotlinOrigin.containingFile
         override fun getTextRange() = originalExpression?.textRange ?: TextRange.EMPTY_RANGE
         override fun getParent() = parent
         override fun getText() = originalExpression?.text.orEmpty()
-        override fun getContainingFile(): PsiFile? = if (originalExpression?.containingFile == kotlinOrigin.containingFile)
-            kotlinOrigin.containingFile else delegate.containingFile
+        override fun getContainingFile(): PsiFile? = if (isPhysical) kotlinOrigin.containingFile else delegate.containingFile
 
         override fun replace(newElement: PsiElement): PsiElement {
             val value = (newElement as? PsiLiteral)?.value as? String ?: return this
@@ -250,6 +249,8 @@ class KtLightAnnotationForSourceEntry(
                 else -> LightElementValue(value, parent, ktOrigin)
             }
 
+    override fun isPhysical() = true
+
     override fun getName() = null
 
     private fun wrapAnnotationValue(value: PsiAnnotationMemberValue): PsiAnnotationMemberValue = wrapAnnotationValue(value, this, {
diff --git a/idea/tests/org/jetbrains/kotlin/asJava/KtLightAnnotationTest.kt b/idea/tests/org/jetbrains/kotlin/asJava/KtLightAnnotationTest.kt
index 335094970b2..3b73e3b77e9 100644
--- a/idea/tests/org/jetbrains/kotlin/asJava/KtLightAnnotationTest.kt
+++ b/idea/tests/org/jetbrains/kotlin/asJava/KtLightAnnotationTest.kt
@@ -78,6 +78,7 @@ class KtLightAnnotationTest : KotlinLightCodeInsightFixtureTestCase() {
         val annotation = myFixture.findClass("AnnotatedClass").methods.first { it.name == "bar" }.parameterList.parameters.single()
                 .expectAnnotations(2).single { it.qualifiedName == "Qualifier" }
         val annotationAttributeVal = annotation.findAttributeValue("value") as PsiElement
+        TestCase.assertTrue(annotationAttributeVal.isPhysical)
         assertTextRangeAndValue("\"foo\"", "foo", annotationAttributeVal)
     }
 
@@ -500,7 +501,6 @@ class KtLightAnnotationTest : KotlinLightCodeInsightFixtureTestCase() {
     private fun assertTextAndRange(expected: String, psiElement: PsiElement) {
         TestCase.assertEquals("mismatch for $psiElement of ${psiElement.javaClass}", expected, psiElement.text)
         TestCase.assertEquals(expected, psiElement.textRange.substring(psiElement.containingFile.text))
-        TestCase.assertEquals(psiElement, PsiAnchor.create(psiElement).retrieve())
     }
 
     private fun assertIsKtLightAnnotation(expected: String, psiElement: PsiElement) {