diff --git a/idea/idea-frontend-fir/idea-fir-low-level-api/src/org/jetbrains/kotlin/idea/fir/low/level/api/IdeFirPhaseManager.kt b/idea/idea-frontend-fir/idea-fir-low-level-api/src/org/jetbrains/kotlin/idea/fir/low/level/api/IdeFirPhaseManager.kt
index d418ef69074..987c385d8ad 100644
--- a/idea/idea-frontend-fir/idea-fir-low-level-api/src/org/jetbrains/kotlin/idea/fir/low/level/api/IdeFirPhaseManager.kt
+++ b/idea/idea-frontend-fir/idea-fir-low-level-api/src/org/jetbrains/kotlin/idea/fir/low/level/api/IdeFirPhaseManager.kt
@@ -11,9 +11,11 @@ import org.jetbrains.kotlin.fir.declarations.FirResolvePhase
 import org.jetbrains.kotlin.fir.resolve.ScopeSession
 import org.jetbrains.kotlin.fir.resolve.transformers.FirPhaseManager
 import org.jetbrains.kotlin.fir.symbols.AbstractFirBasedSymbol
+import org.jetbrains.kotlin.idea.fir.low.level.api.api.tryCollectDesignation
 import org.jetbrains.kotlin.idea.fir.low.level.api.file.builder.ModuleFileCache
 import org.jetbrains.kotlin.idea.fir.low.level.api.lazy.resolve.FirLazyDeclarationResolver
 import org.jetbrains.kotlin.idea.fir.low.level.api.sessions.FirSessionInvalidator
+import org.jetbrains.kotlin.idea.fir.low.level.api.util.isLocalDeclaration
 
 @ThreadSafeMutableState
 internal class IdeFirPhaseManager(
@@ -26,6 +28,7 @@ internal class IdeFirPhaseManager(
         requiredPhase: FirResolvePhase
     ) {
         val fir = symbol.fir as FirDeclaration
+        if (fir.isLocalDeclaration) return
         try {
             if (fir.resolvePhase < requiredPhase) { //TODO Make thread safe
                 lazyDeclarationResolver.lazyResolveDeclaration(
diff --git a/idea/idea-frontend-fir/idea-fir-low-level-api/src/org/jetbrains/kotlin/idea/fir/low/level/api/api/FirDeclarationDesignation.kt b/idea/idea-frontend-fir/idea-fir-low-level-api/src/org/jetbrains/kotlin/idea/fir/low/level/api/api/FirDeclarationDesignation.kt
index 08e7d919002..8b49fd35dab 100644
--- a/idea/idea-frontend-fir/idea-fir-low-level-api/src/org/jetbrains/kotlin/idea/fir/low/level/api/api/FirDeclarationDesignation.kt
+++ b/idea/idea-frontend-fir/idea-fir-low-level-api/src/org/jetbrains/kotlin/idea/fir/low/level/api/api/FirDeclarationDesignation.kt
@@ -5,16 +5,16 @@
 
 package org.jetbrains.kotlin.idea.fir.low.level.api.api
 
+import org.jetbrains.kotlin.descriptors.Visibilities
 import org.jetbrains.kotlin.fir.containingClass
-import org.jetbrains.kotlin.fir.containingClassForLocal
 import org.jetbrains.kotlin.fir.declarations.*
 import org.jetbrains.kotlin.fir.render
 import org.jetbrains.kotlin.fir.renderWithType
 import org.jetbrains.kotlin.fir.resolve.firProvider
 import org.jetbrains.kotlin.fir.resolve.toFirRegularClass
 import org.jetbrains.kotlin.idea.fir.low.level.api.util.getContainingFile
+import org.jetbrains.kotlin.idea.fir.low.level.api.util.isLocalDeclaration
 import org.jetbrains.kotlin.idea.util.ifFalse
-import org.jetbrains.kotlin.idea.util.ifTrue
 
 class FirDeclarationDesignationWithFile(
     path: List<FirDeclaration>,
@@ -55,13 +55,17 @@ private fun FirRegularClass.collectForNonLocal(): List<FirDeclaration> {
 }
 
 private fun collectDesignationPath(declaration: FirDeclaration): List<FirDeclaration>? {
+    if (declaration.isLocalDeclaration) return null
     val containingClass = when (declaration) {
-        is FirCallableDeclaration<*> ->
+        is FirCallableDeclaration<*> -> {
+            val isLocalMember = (declaration as? FirCallableMemberDeclaration<*>)?.status?.visibility == Visibilities.Local
+            if (isLocalMember) return null
             when (declaration) {
                 is FirSimpleFunction, is FirProperty, is FirField, is FirConstructor ->
                     declaration.containingClass()?.toFirRegularClass(declaration.moduleData.session)
                 else -> return null
             }
+        }
         is FirClassLikeDeclaration<*> -> {
             if (declaration.isLocal) return null
             declaration.symbol.classId.outerClassId?.let(declaration.moduleData.session.firProvider::getFirClassifierByFqName)
diff --git a/idea/idea-frontend-fir/idea-fir-low-level-api/src/org/jetbrains/kotlin/idea/fir/low/level/api/lazy/resolve/FirLazyDeclarationResolver.kt b/idea/idea-frontend-fir/idea-fir-low-level-api/src/org/jetbrains/kotlin/idea/fir/low/level/api/lazy/resolve/FirLazyDeclarationResolver.kt
index 96b206ac1a3..f77892c9381 100644
--- a/idea/idea-frontend-fir/idea-fir-low-level-api/src/org/jetbrains/kotlin/idea/fir/low/level/api/lazy/resolve/FirLazyDeclarationResolver.kt
+++ b/idea/idea-frontend-fir/idea-fir-low-level-api/src/org/jetbrains/kotlin/idea/fir/low/level/api/lazy/resolve/FirLazyDeclarationResolver.kt
@@ -22,7 +22,6 @@ import org.jetbrains.kotlin.idea.fir.low.level.api.transformers.FirProviderInter
 import org.jetbrains.kotlin.idea.fir.low.level.api.transformers.LazyTransformerFactory
 import org.jetbrains.kotlin.idea.fir.low.level.api.util.checkCanceled
 import org.jetbrains.kotlin.idea.fir.low.level.api.util.ensurePhase
-import org.jetbrains.kotlin.idea.util.ifFalse
 import org.jetbrains.kotlin.idea.util.ifTrue
 
 internal class FirLazyDeclarationResolver(private val firFileBuilder: FirFileBuilder) {
@@ -207,19 +206,15 @@ internal class FirLazyDeclarationResolver(private val firFileBuilder: FirFileBui
         }
 
         val provider = firDeclarationToResolve.moduleData.session.firIdeProvider
-        val (designation, wasInLocalDeclaration) =
-            firDeclarationToResolve.getNonLocalDeclarationToResolveAndInLocal(provider, moduleFileCache, firFileBuilder)
+        val (designation, forceToBody) =
+            firDeclarationToResolve.getNonLocalDeclarationToResolveAndForceUpgradeToBodyPhase(provider, moduleFileCache, firFileBuilder)
+        val neededPhase = if (forceToBody) FirResolvePhase.BODY_RESOLVE else toPhase
 
         //TODO Should be synchronised
         if (!designation.declaration.isValidForResolve()) return
 
         //TODO Should be synchronised
         val resolvePhase = designation.resolvePhaseForAllDeclarations(includeDeclarationPhase = declarationPhaseDowngraded)
-
-        val neededPhase = if (wasInLocalDeclaration) {
-            if (toPhase >= FirResolvePhase.CONTRACTS) FirResolvePhase.BODY_RESOLVE else maxOf(FirResolvePhase.CONTRACTS, toPhase)
-        } else toPhase
-
         if (resolvePhase >= neededPhase) return
 
         moduleFileCache.firFileLockProvider.runCustomResolveUnderLock(designation.firFile, checkPCE) {
diff --git a/idea/idea-frontend-fir/idea-fir-low-level-api/src/org/jetbrains/kotlin/idea/fir/low/level/api/lazy/resolve/NonLocalDeclarationUtils.kt b/idea/idea-frontend-fir/idea-fir-low-level-api/src/org/jetbrains/kotlin/idea/fir/low/level/api/lazy/resolve/NonLocalDeclarationUtils.kt
index c4ae00f433c..9d1d15f2111 100644
--- a/idea/idea-frontend-fir/idea-fir-low-level-api/src/org/jetbrains/kotlin/idea/fir/low/level/api/lazy/resolve/NonLocalDeclarationUtils.kt
+++ b/idea/idea-frontend-fir/idea-fir-low-level-api/src/org/jetbrains/kotlin/idea/fir/low/level/api/lazy/resolve/NonLocalDeclarationUtils.kt
@@ -21,7 +21,7 @@ import org.jetbrains.kotlin.psi.*
 import org.jetbrains.kotlin.psi.psiUtil.containingClassOrObject
 import org.jetbrains.kotlin.psi.psiUtil.getParentOfType
 
-internal fun FirDeclaration.getNonLocalDeclarationToResolveAndInLocal(
+internal fun FirDeclaration.getNonLocalDeclarationToResolveAndForceUpgradeToBodyPhase(
     provider: FirProvider,
     moduleFileCache: ModuleFileCache,
     firFileBuilder: FirFileBuilder
diff --git a/idea/idea-frontend-fir/idea-fir-low-level-api/src/org/jetbrains/kotlin/idea/fir/low/level/api/util/declarationUtils.kt b/idea/idea-frontend-fir/idea-fir-low-level-api/src/org/jetbrains/kotlin/idea/fir/low/level/api/util/declarationUtils.kt
index dbb091d1f97..0e28c6b92d6 100644
--- a/idea/idea-frontend-fir/idea-fir-low-level-api/src/org/jetbrains/kotlin/idea/fir/low/level/api/util/declarationUtils.kt
+++ b/idea/idea-frontend-fir/idea-fir-low-level-api/src/org/jetbrains/kotlin/idea/fir/low/level/api/util/declarationUtils.kt
@@ -5,10 +5,8 @@
 
 package org.jetbrains.kotlin.idea.fir.low.level.api.util
 
-import org.jetbrains.kotlin.fir.declarations.FirClassLikeDeclaration
-import org.jetbrains.kotlin.fir.declarations.FirDeclaration
-import org.jetbrains.kotlin.fir.declarations.FirFile
-import org.jetbrains.kotlin.fir.declarations.FirRegularClass
+import org.jetbrains.kotlin.descriptors.Visibilities
+import org.jetbrains.kotlin.fir.declarations.*
 import org.jetbrains.kotlin.fir.psi
 import org.jetbrains.kotlin.fir.realPsi
 import org.jetbrains.kotlin.fir.resolve.providers.FirSymbolProvider
@@ -128,3 +126,12 @@ private fun KtClassLikeDeclaration.findFir(firSymbolProvider: FirSymbolProvider)
 
 val FirDeclaration.isGeneratedDeclaration
     get() = realPsi == null
+
+
+internal val FirDeclaration.isLocalDeclaration: Boolean
+    get() = when (this) {
+        is FirCallableDeclaration<*> ->
+            ((this as? FirCallableMemberDeclaration<*>)?.status?.visibility == Visibilities.Local)
+        is FirClassLikeDeclaration<*> -> isLocal
+        else -> true
+    }
\ No newline at end of file