diff --git a/compiler/frontend/src/org/jetbrains/kotlin/resolve/calls/tower/PSICallResolver.kt b/compiler/frontend/src/org/jetbrains/kotlin/resolve/calls/tower/PSICallResolver.kt
index 2ae266ff383..d14c6b2d707 100644
--- a/compiler/frontend/src/org/jetbrains/kotlin/resolve/calls/tower/PSICallResolver.kt
+++ b/compiler/frontend/src/org/jetbrains/kotlin/resolve/calls/tower/PSICallResolver.kt
@@ -26,6 +26,7 @@ import org.jetbrains.kotlin.diagnostics.Errors
 import org.jetbrains.kotlin.incremental.components.LookupLocation
 import org.jetbrains.kotlin.name.Name
 import org.jetbrains.kotlin.psi.*
+import org.jetbrains.kotlin.psi.psiUtil.getParentOfType
 import org.jetbrains.kotlin.psi.psiUtil.referenceExpression
 import org.jetbrains.kotlin.resolve.BindingContext
 import org.jetbrains.kotlin.resolve.ModifierCheckerCore
@@ -483,8 +484,7 @@ class PSICallResolver(
     ): PSIKotlinCallArgument {
         val builtIns = outerCallContext.scope.ownerDescriptor.builtIns
         val parseErrorArgument = ParseErrorKotlinCallArgument(valueArgument, startDataFlowInfo, builtIns)
-        val ktExpression = KtPsiUtil.deparenthesize(valueArgument.getArgumentExpression()) ?:
-                           return parseErrorArgument
+        val ktExpression = extractArgumentExpression(outerCallContext, valueArgument) ?: parseErrorArgument
 
         val argumentName = valueArgument.getArgumentName()?.asName
 
@@ -499,6 +499,7 @@ class PSICallResolver(
                                  if (ktExpression.hasBlockBody()) builtIns.unitType else null
                 FunctionExpressionImpl(outerCallContext, valueArgument, startDataFlowInfo, argumentName, ktExpression, receiverType, parametersTypes, returnType)
             }
+
             else -> null
         }
         if (lambdaArgument != null) {
@@ -563,6 +564,19 @@ class PSICallResolver(
         return createSimplePSICallArgument(context, valueArgument, typeInfo) ?: parseErrorArgument
     }
 
+    private fun extractArgumentExpression(outerCallContext: BasicCallResolutionContext, valueArgument: ValueArgument): KtExpression? {
+        val argumentExpression = valueArgument.getArgumentExpression() ?: return null
+
+        val ktExpression = ArgumentTypeResolver.getFunctionLiteralArgumentIfAny(argumentExpression, outerCallContext) ?:
+                           ArgumentTypeResolver.getCallableReferenceExpressionIfAny(argumentExpression, outerCallContext) ?:
+                           KtPsiUtil.deparenthesize(argumentExpression)
+
+        return when (ktExpression) {
+            is KtFunctionLiteral -> ktExpression.getParentOfType<KtLambdaExpression>(true)
+            else -> ktExpression
+        }
+    }
+
     private fun checkNoSpread(context: BasicCallResolutionContext, valueArgument: ValueArgument) {
         valueArgument.getSpreadElement()?.let {
             context.trace.report(Errors.SPREAD_OF_LAMBDA_OR_CALLABLE_REFERENCE.on(it))
diff --git a/compiler/testData/codegen/box/regressions/functionLiteralAsLastExpressionInBlock.kt b/compiler/testData/codegen/box/regressions/functionLiteralAsLastExpressionInBlock.kt
new file mode 100644
index 00000000000..13ed03338d2
--- /dev/null
+++ b/compiler/testData/codegen/box/regressions/functionLiteralAsLastExpressionInBlock.kt
@@ -0,0 +1,8 @@
+fun box(): String {
+    val p: (String) -> Boolean = if (true) {
+        { true }
+    } else {
+        { true }
+    }
+    return "OK"
+}
\ No newline at end of file
diff --git a/compiler/tests-ir-jvm/tests/org/jetbrains/kotlin/codegen/ir/IrBlackBoxCodegenTestGenerated.java b/compiler/tests-ir-jvm/tests/org/jetbrains/kotlin/codegen/ir/IrBlackBoxCodegenTestGenerated.java
index f07b20c6115..810442954fa 100644
--- a/compiler/tests-ir-jvm/tests/org/jetbrains/kotlin/codegen/ir/IrBlackBoxCodegenTestGenerated.java
+++ b/compiler/tests-ir-jvm/tests/org/jetbrains/kotlin/codegen/ir/IrBlackBoxCodegenTestGenerated.java
@@ -16598,6 +16598,12 @@ public class IrBlackBoxCodegenTestGenerated extends AbstractIrBlackBoxCodegenTes
             doTest(fileName);
         }
 
+        @TestMetadata("functionLiteralAsLastExpressionInBlock.kt")
+        public void testFunctionLiteralAsLastExpressionInBlock() throws Exception {
+            String fileName = KotlinTestUtils.navigationMetadata("compiler/testData/codegen/box/regressions/functionLiteralAsLastExpressionInBlock.kt");
+            doTest(fileName);
+        }
+
         @TestMetadata("generic.kt")
         public void testGeneric() throws Exception {
             String fileName = KotlinTestUtils.navigationMetadata("compiler/testData/codegen/box/regressions/generic.kt");
diff --git a/compiler/tests/org/jetbrains/kotlin/codegen/BlackBoxCodegenTestGenerated.java b/compiler/tests/org/jetbrains/kotlin/codegen/BlackBoxCodegenTestGenerated.java
index e8501248308..ec6bd92cd46 100644
--- a/compiler/tests/org/jetbrains/kotlin/codegen/BlackBoxCodegenTestGenerated.java
+++ b/compiler/tests/org/jetbrains/kotlin/codegen/BlackBoxCodegenTestGenerated.java
@@ -16598,6 +16598,12 @@ public class BlackBoxCodegenTestGenerated extends AbstractBlackBoxCodegenTest {
             doTest(fileName);
         }
 
+        @TestMetadata("functionLiteralAsLastExpressionInBlock.kt")
+        public void testFunctionLiteralAsLastExpressionInBlock() throws Exception {
+            String fileName = KotlinTestUtils.navigationMetadata("compiler/testData/codegen/box/regressions/functionLiteralAsLastExpressionInBlock.kt");
+            doTest(fileName);
+        }
+
         @TestMetadata("generic.kt")
         public void testGeneric() throws Exception {
             String fileName = KotlinTestUtils.navigationMetadata("compiler/testData/codegen/box/regressions/generic.kt");
diff --git a/compiler/tests/org/jetbrains/kotlin/codegen/LightAnalysisModeTestGenerated.java b/compiler/tests/org/jetbrains/kotlin/codegen/LightAnalysisModeTestGenerated.java
index f35172d5d72..ba614909224 100644
--- a/compiler/tests/org/jetbrains/kotlin/codegen/LightAnalysisModeTestGenerated.java
+++ b/compiler/tests/org/jetbrains/kotlin/codegen/LightAnalysisModeTestGenerated.java
@@ -16598,6 +16598,12 @@ public class LightAnalysisModeTestGenerated extends AbstractLightAnalysisModeTes
             doTest(fileName);
         }
 
+        @TestMetadata("functionLiteralAsLastExpressionInBlock.kt")
+        public void testFunctionLiteralAsLastExpressionInBlock() throws Exception {
+            String fileName = KotlinTestUtils.navigationMetadata("compiler/testData/codegen/box/regressions/functionLiteralAsLastExpressionInBlock.kt");
+            doTest(fileName);
+        }
+
         @TestMetadata("generic.kt")
         public void testGeneric() throws Exception {
             String fileName = KotlinTestUtils.navigationMetadata("compiler/testData/codegen/box/regressions/generic.kt");
diff --git a/js/js.tests/test/org/jetbrains/kotlin/js/test/semantics/JsCodegenBoxTestGenerated.java b/js/js.tests/test/org/jetbrains/kotlin/js/test/semantics/JsCodegenBoxTestGenerated.java
index 86dd4b7c84f..714548953aa 100644
--- a/js/js.tests/test/org/jetbrains/kotlin/js/test/semantics/JsCodegenBoxTestGenerated.java
+++ b/js/js.tests/test/org/jetbrains/kotlin/js/test/semantics/JsCodegenBoxTestGenerated.java
@@ -20246,6 +20246,12 @@ public class JsCodegenBoxTestGenerated extends AbstractJsCodegenBoxTest {
             doTest(fileName);
         }
 
+        @TestMetadata("functionLiteralAsLastExpressionInBlock.kt")
+        public void testFunctionLiteralAsLastExpressionInBlock() throws Exception {
+            String fileName = KotlinTestUtils.navigationMetadata("compiler/testData/codegen/box/regressions/functionLiteralAsLastExpressionInBlock.kt");
+            doTest(fileName);
+        }
+
         @TestMetadata("generic.kt")
         public void testGeneric() throws Exception {
             String fileName = KotlinTestUtils.navigationMetadata("compiler/testData/codegen/box/regressions/generic.kt");