diff --git a/compiler/frontend/serialization/src/org/jetbrains/jet/descriptors/serialization/DescriptorDeserializer.java b/compiler/frontend/serialization/src/org/jetbrains/jet/descriptors/serialization/DescriptorDeserializer.java
index 5b53c0600eb..acdcfd247f2 100644
--- a/compiler/frontend/serialization/src/org/jetbrains/jet/descriptors/serialization/DescriptorDeserializer.java
+++ b/compiler/frontend/serialization/src/org/jetbrains/jet/descriptors/serialization/DescriptorDeserializer.java
@@ -299,8 +299,7 @@ public class DescriptorDeserializer {
                 Collections.<AnnotationDescriptor>emptyList(),
                 nameResolver.getName(proto.getName()),
                 typeDeserializer.type(proto.getType()),
-                // TODO: declaresDefaultValue
-                false,
+                Flags.declaresDefaultValue(proto.getFlags()),
                 typeDeserializer.typeOrNull(proto.hasVarargElementType() ? proto.getVarargElementType() : null));
     }
 }
diff --git a/compiler/frontend/serialization/src/org/jetbrains/jet/descriptors/serialization/DescriptorSerializer.java b/compiler/frontend/serialization/src/org/jetbrains/jet/descriptors/serialization/DescriptorSerializer.java
index 1eacbb09d1e..26d400c915a 100644
--- a/compiler/frontend/serialization/src/org/jetbrains/jet/descriptors/serialization/DescriptorSerializer.java
+++ b/compiler/frontend/serialization/src/org/jetbrains/jet/descriptors/serialization/DescriptorSerializer.java
@@ -147,7 +147,7 @@ public class DescriptorSerializer {
     private ProtoBuf.Callable.ValueParameter.Builder valueParameter(ValueParameterDescriptor descriptor) {
         ProtoBuf.Callable.ValueParameter.Builder builder = ProtoBuf.Callable.ValueParameter.newBuilder();
 
-        builder.setFlags(flags(descriptor));
+        builder.setFlags(Flags.getValueParameterFlags(descriptor.declaresDefaultValue()));
 
         builder.setName(nameTable.getSimpleNameIndex(descriptor.getName()));
 
@@ -161,11 +161,6 @@ public class DescriptorSerializer {
         return builder;
     }
 
-    private int flags(ValueParameterDescriptor descriptor) {
-        // TODO
-        return 0;
-    }
-
     private ProtoBuf.TypeParameter.Builder typeParameter(TypeParameterDescriptor typeParameter) {
         ProtoBuf.TypeParameter.Builder builder = ProtoBuf.TypeParameter.newBuilder();
 
diff --git a/compiler/frontend/serialization/src/org/jetbrains/jet/descriptors/serialization/Flags.java b/compiler/frontend/serialization/src/org/jetbrains/jet/descriptors/serialization/Flags.java
index 983cc423d0e..95c30287e95 100644
--- a/compiler/frontend/serialization/src/org/jetbrains/jet/descriptors/serialization/Flags.java
+++ b/compiler/frontend/serialization/src/org/jetbrains/jet/descriptors/serialization/Flags.java
@@ -33,6 +33,11 @@ public class Flags {
     public static final int INLINE_BIT_COUNT = 1;
     public static final int INLINE_OFFSET = MEMBER_KIND_OFFSET + MEMBER_KIND_BIT_COUNT;
 
+    // Parameters
+
+    public static final int DECLARES_DEFAULT_VALUE_BIT_COUNT = 1;
+    public static final int DECLARES_DEFAULT_VALUE_OFFSET = 0;
+
     // ---
 
     private static final Boolean[] BOOLEANS = { false, true };
@@ -87,6 +92,10 @@ public class Flags {
         return getValue(flags, BOOLEANS, INLINE_BIT_COUNT, INLINE_OFFSET);
     }
 
+    public static boolean declaresDefaultValue(int flags) {
+        return getValue(flags, BOOLEANS, DECLARES_DEFAULT_VALUE_BIT_COUNT, DECLARES_DEFAULT_VALUE_OFFSET);
+    }
+
     public static int getClassFlags(Visibility visibility, Modality modality, ClassKind kind, boolean inner) {
         int visibilityInt = visibility(visibility).getNumber();
         int modalityInt = modality(modality).getNumber();
@@ -183,4 +192,10 @@ public class Flags {
         }
         throw new IllegalArgumentException("Unknown member kind: " + kind);
     }
+
+    public static int getValueParameterFlags(boolean declaresDefaultValue) {
+        int declaresDefaultValueInt = declaresDefaultValue ? 1 : 0;
+        return declaresDefaultValueInt << DECLARES_DEFAULT_VALUE_OFFSET
+                ;
+    }
 }