diff --git a/compiler/testData/diagnostics/tests/FreeFunctionCalledAsExtension.txt b/compiler/testData/diagnostics/tests/FreeFunctionCalledAsExtension.txt
index 9058f1c2616..f3169f2e820 100644
--- a/compiler/testData/diagnostics/tests/FreeFunctionCalledAsExtension.txt
+++ b/compiler/testData/diagnostics/tests/FreeFunctionCalledAsExtension.txt
@@ -1,7 +1,7 @@
 package
 
 public fun foo(/*0*/ a: (kotlin.String) -> kotlin.Unit): kotlin.Unit
-public fun foo(/*0*/ a: A): kotlin.Unit
+public fun foo(/*0*/ a: @kotlin.ExtensionFunctionType A): kotlin.Unit
 
 public interface A : (kotlin.String) -> kotlin.Unit {
     public open override /*1*/ /*fake_override*/ fun equals(/*0*/ other: kotlin.Any?): kotlin.Boolean
diff --git a/compiler/testData/diagnostics/tests/callableReference/function/annotationClassConstructor.txt b/compiler/testData/diagnostics/tests/callableReference/function/annotationClassConstructor.txt
index 4dfffcc7cae..a7768c7e259 100644
--- a/compiler/testData/diagnostics/tests/callableReference/function/annotationClassConstructor.txt
+++ b/compiler/testData/diagnostics/tests/callableReference/function/annotationClassConstructor.txt
@@ -1,7 +1,7 @@
 package
 
 public val annClassRef: kotlin.reflect.KClass<Ann>
-public val annCtorRef: kotlin.reflect.KFunction1<kotlin.String, Ann>
+public val annCtorRef: kotlin.reflect.KFunction1<@kotlin.ParameterName(name = "prop") kotlin.String, Ann>
 public val annPropRef: kotlin.reflect.KProperty1<Ann, kotlin.String>
 
 public final annotation class Ann : kotlin.Annotation {
diff --git a/compiler/testData/diagnostics/tests/callableReference/sam.txt b/compiler/testData/diagnostics/tests/callableReference/sam.txt
index 09bf9d12812..cc45939c336 100644
--- a/compiler/testData/diagnostics/tests/callableReference/sam.txt
+++ b/compiler/testData/diagnostics/tests/callableReference/sam.txt
@@ -5,14 +5,14 @@ public fun f2(): kotlin.reflect.KFunction1<java.lang.Runnable, kotlin.Unit>
 public fun f3(): kotlin.reflect.KClass<java.lang.Runnable>
 public fun f4(): kotlin.reflect.KFunction1<java.lang.Runnable, kotlin.Unit>
 public fun f5(): kotlin.reflect.KClass<test.GenericSam<*>>
-public fun f6(): kotlin.reflect.KFunction2<test.GenericSam<*>, kotlin.Nothing!, kotlin.Unit>
+public fun f6(): kotlin.reflect.KFunction2<test.GenericSam<*>, @kotlin.ParameterName(name = "t") kotlin.Nothing!, kotlin.Unit>
 public fun f7(): kotlin.reflect.KClass<test.GenericSam<*>>
-public fun f8(): kotlin.reflect.KFunction2<test.GenericSam<kotlin.String>, kotlin.String!, kotlin.Unit>
+public fun f8(): kotlin.reflect.KFunction2<test.GenericSam<kotlin.String>, @kotlin.ParameterName(name = "t") kotlin.String!, kotlin.Unit>
 public fun g1(): kotlin.reflect.KClass<java.lang.Runnable>
 public fun g2(): kotlin.reflect.KFunction0<kotlin.Unit>
 public fun g3(): kotlin.reflect.KClass<java.lang.Runnable>
 public fun g4(): kotlin.reflect.KFunction0<kotlin.Unit>
 public fun g5(): kotlin.reflect.KClass<test.GenericSam<kotlin.String>>
-public fun g6(): kotlin.reflect.KFunction1<kotlin.String!, kotlin.Unit>
+public fun g6(): kotlin.reflect.KFunction1<@kotlin.ParameterName(name = "t") kotlin.String!, kotlin.Unit>
 public fun g7(): kotlin.reflect.KClass<test.GenericSam<kotlin.String>>
-public fun g8(): kotlin.reflect.KFunction1<kotlin.String!, kotlin.Unit>
+public fun g8(): kotlin.reflect.KFunction1<@kotlin.ParameterName(name = "t") kotlin.String!, kotlin.Unit>
diff --git a/compiler/testData/diagnostics/tests/deprecated/functionUsage.txt b/compiler/testData/diagnostics/tests/deprecated/functionUsage.txt
index eb7421ac0f4..1c23d355d75 100644
--- a/compiler/testData/diagnostics/tests/deprecated/functionUsage.txt
+++ b/compiler/testData/diagnostics/tests/deprecated/functionUsage.txt
@@ -4,7 +4,7 @@ package
 public fun block(): kotlin.Unit
 public fun expression(): UsefulClass
 public fun invoker(): kotlin.Unit
-public fun reflection(): kotlin.reflect.KFunction1<kotlin.Int, UsefulClass>
+public fun reflection(): kotlin.reflect.KFunction1<@kotlin.ParameterName(name = "param") kotlin.Int, UsefulClass>
 public fun reflection2(): kotlin.reflect.KFunction1<UsefulClass, kotlin.Unit>
 @kotlin.Deprecated(message = "does nothing good") public fun kotlin.Any.doNothing(): kotlin.String
 
diff --git a/core/descriptors/src/org/jetbrains/kotlin/renderer/DescriptorRenderer.kt b/core/descriptors/src/org/jetbrains/kotlin/renderer/DescriptorRenderer.kt
index 00a2d4a4daf..4c027bf8f8b 100644
--- a/core/descriptors/src/org/jetbrains/kotlin/renderer/DescriptorRenderer.kt
+++ b/core/descriptors/src/org/jetbrains/kotlin/renderer/DescriptorRenderer.kt
@@ -223,9 +223,7 @@ object ExcludedTypeAnnotations {
 
     val internalAnnotationsForResolve = setOf(
             FqName("kotlin.internal.NoInfer"),
-            FqName("kotlin.internal.Exact"),
-            KotlinBuiltIns.FQ_NAMES.extensionFunctionType,
-            KotlinBuiltIns.FQ_NAMES.parameterName
+            FqName("kotlin.internal.Exact")
     )
 }
 
diff --git a/core/descriptors/src/org/jetbrains/kotlin/renderer/DescriptorRendererImpl.kt b/core/descriptors/src/org/jetbrains/kotlin/renderer/DescriptorRendererImpl.kt
index a3cfb7e88e9..0bc605b228a 100644
--- a/core/descriptors/src/org/jetbrains/kotlin/renderer/DescriptorRendererImpl.kt
+++ b/core/descriptors/src/org/jetbrains/kotlin/renderer/DescriptorRendererImpl.kt
@@ -46,6 +46,13 @@ internal class DescriptorRendererImpl(
         assert(options.isLocked)
     }
 
+    private val functionTypeAnnotationsRenderer: DescriptorRendererImpl by lazy {
+        this.withOptions { excludedTypeAnnotationClasses += listOf(KotlinBuiltIns.FQ_NAMES.extensionFunctionType) } as DescriptorRendererImpl
+    }
+    private val functionTypeParameterTypesRenderer: DescriptorRenderer by lazy {
+        this.withOptions { excludedTypeAnnotationClasses += listOf(KotlinBuiltIns.FQ_NAMES.parameterName) }
+    }
+
     /* FORMATTING */
     private fun renderKeyword(keyword: String): String {
         when (textFormat) {
@@ -294,7 +301,10 @@ internal class DescriptorRendererImpl(
 
     private fun StringBuilder.renderFunctionType(type: KotlinType) {
         val lengthBefore = length
-        renderAnnotations(type)
+        // we need special renderer to skip @ExtensionFunctionType
+        with(functionTypeAnnotationsRenderer) {
+            renderAnnotations(type)
+        }
         val hasAnnotations = length != lengthBefore
 
         val isNullable = type.isMarkedNullable
@@ -335,7 +345,8 @@ internal class DescriptorRendererImpl(
                 append(renderName(name))
                 append(": ")
             }
-            append(renderTypeProjection(typeProjection))
+
+            append(functionTypeParameterTypesRenderer.renderTypeProjection(typeProjection))
         }
 
         append(") ").append(arrow()).append(" ")
diff --git a/idea/idea-analysis/src/org/jetbrains/kotlin/idea/decompiler/textBuilder/buildDecompiledText.kt b/idea/idea-analysis/src/org/jetbrains/kotlin/idea/decompiler/textBuilder/buildDecompiledText.kt
index c7fdc9c26b8..0d48d132365 100644
--- a/idea/idea-analysis/src/org/jetbrains/kotlin/idea/decompiler/textBuilder/buildDecompiledText.kt
+++ b/idea/idea-analysis/src/org/jetbrains/kotlin/idea/decompiler/textBuilder/buildDecompiledText.kt
@@ -17,7 +17,6 @@
 package org.jetbrains.kotlin.idea.decompiler.textBuilder
 
 import com.intellij.openapi.util.TextRange
-import org.jetbrains.kotlin.builtins.KotlinBuiltIns
 import org.jetbrains.kotlin.descriptors.*
 import org.jetbrains.kotlin.idea.decompiler.navigation.ByDescriptorIndexer
 import org.jetbrains.kotlin.name.FqName
@@ -39,9 +38,7 @@ fun DescriptorRendererOptions.defaultDecompilerRendererOptions() {
     classWithPrimaryConstructor = true
     secondaryConstructorsAsPrimary = false
     modifiers = DescriptorRendererModifier.ALL
-    excludedTypeAnnotationClasses = (ExcludedTypeAnnotations.annotationsForNullabilityAndMutability +
-                                     KotlinBuiltIns.FQ_NAMES.extensionFunctionType +
-                                     KotlinBuiltIns.FQ_NAMES.parameterName).toSet()
+    excludedTypeAnnotationClasses = ExcludedTypeAnnotations.annotationsForNullabilityAndMutability
     alwaysRenderModifiers = true
     parameterNamesInFunctionalTypes = false // to support parameters names in decompiled text we need to load annotation arguments
 }