diff --git a/idea/src/org/jetbrains/kotlin/idea/formatter/kotlinSpacingRules.kt b/idea/src/org/jetbrains/kotlin/idea/formatter/kotlinSpacingRules.kt
index 9e33571ad82..5aa0da6e5d0 100644
--- a/idea/src/org/jetbrains/kotlin/idea/formatter/kotlinSpacingRules.kt
+++ b/idea/src/org/jetbrains/kotlin/idea/formatter/kotlinSpacingRules.kt
@@ -98,7 +98,7 @@ fun createSpacingBuilder(settings: CodeStyleSettings): KotlinSpacingBuilder {
             // ENUM_ENTRY - ENUM_ENTRY is exception
             between(ENUM_ENTRY, DECLARATIONS).blankLines(1)
 
-            before(FUN).lineBreakInCode()
+            beforeInside(FUN, TokenSet.create(BODY, CLASS_BODY)).lineBreakInCode()
             before(PROPERTY).lineBreakInCode()
 
 
diff --git a/idea/testData/formatter/FunctionExpression.after.kt b/idea/testData/formatter/FunctionExpression.after.kt
new file mode 100644
index 00000000000..731b16e5c52
--- /dev/null
+++ b/idea/testData/formatter/FunctionExpression.after.kt
@@ -0,0 +1,34 @@
+val a = fun () {
+}
+val b = fun test() {
+}
+
+val c = fun() {
+}
+val c = fun() = 4
+
+val c = fun() =
+        4
+
+val c = fun() {
+}
+val c = fun() = 4
+
+fun test() = fun test() = 4
+
+fun test() {
+    test(fun test() {
+    })
+    test(fun test() = 5)
+
+    test(fun test() = fun test(a: Int) = 2)
+
+    2.(fun test() {
+    })()
+
+    (fun() = 4)
+    (fun() {
+    })
+
+    test(fun test() = 4)
+}
\ No newline at end of file
diff --git a/idea/testData/formatter/FunctionExpression.kt b/idea/testData/formatter/FunctionExpression.kt
new file mode 100644
index 00000000000..df1ca355711
--- /dev/null
+++ b/idea/testData/formatter/FunctionExpression.kt
@@ -0,0 +1,27 @@
+val a = fun () {}
+val b = fun test() {}
+
+val c=fun(){}
+val c=fun()=4
+
+val c=fun()=
+        4
+
+val c   =   fun()   {}
+val c   =    fun()    =  4
+
+fun test() = fun test() = 4
+
+fun test() {
+    test(fun test() {})
+    test(fun test() = 5)
+
+    test(fun test() = fun test(a: Int) = 2)
+
+    2.(fun test() {})()
+
+    (fun()=4)
+    (fun(){})
+
+    test(    fun     test     (    ) = 4   )
+}
\ No newline at end of file
diff --git a/idea/testData/quickfix/migration/lambdaSyntax/afterLambdaInsideLambda.kt b/idea/testData/quickfix/migration/lambdaSyntax/afterLambdaInsideLambda.kt
index a4203c9c1f7..55753af2bfd 100644
--- a/idea/testData/quickfix/migration/lambdaSyntax/afterLambdaInsideLambda.kt
+++ b/idea/testData/quickfix/migration/lambdaSyntax/afterLambdaInsideLambda.kt
@@ -6,6 +6,5 @@ fun foo(a: Any) {}
 
 val a = foo  @a {
 
-    val a =
-            fun (): Int = 1
+    val a = fun (): Int = 1
 }
\ No newline at end of file
diff --git a/idea/testData/quickfix/migration/lambdaSyntax/afterReceiverAndReturnInExpression.kt b/idea/testData/quickfix/migration/lambdaSyntax/afterReceiverAndReturnInExpression.kt
index 3fb482ed2d4..8cbc193d02c 100644
--- a/idea/testData/quickfix/migration/lambdaSyntax/afterReceiverAndReturnInExpression.kt
+++ b/idea/testData/quickfix/migration/lambdaSyntax/afterReceiverAndReturnInExpression.kt
@@ -1,5 +1,4 @@
 // "Migrate lambda syntax" "true"
 
 
-val a =
-        fun Int.(a: Int): String = ""
\ No newline at end of file
+val a = fun Int.(a: Int): String = ""
\ No newline at end of file
diff --git a/idea/testData/quickfix/migration/lambdaSyntax/lambdaSyntaxMultiple.after.data.Sample.kt b/idea/testData/quickfix/migration/lambdaSyntax/lambdaSyntaxMultiple.after.data.Sample.kt
index 96c94faf368..34db40fdd86 100644
--- a/idea/testData/quickfix/migration/lambdaSyntax/lambdaSyntaxMultiple.after.data.Sample.kt
+++ b/idea/testData/quickfix/migration/lambdaSyntax/lambdaSyntaxMultiple.after.data.Sample.kt
@@ -1,8 +1,6 @@
 val h = { -> }
 
-val l = @bar (
-        fun Int.bar() {
-        })
+val l = @bar (fun Int.bar() {
+})
 
-val s = (
-        fun (): Int = 5)()
\ No newline at end of file
+val s = (fun (): Int = 5)()
\ No newline at end of file
diff --git a/idea/testData/quickfix/migration/lambdaSyntax/lambdaSyntaxMultiple.after.kt b/idea/testData/quickfix/migration/lambdaSyntax/lambdaSyntaxMultiple.after.kt
index c80a50780c6..4b1ffd1abde 100644
--- a/idea/testData/quickfix/migration/lambdaSyntax/lambdaSyntaxMultiple.after.kt
+++ b/idea/testData/quickfix/migration/lambdaSyntax/lambdaSyntaxMultiple.after.kt
@@ -1,9 +1,7 @@
 // "Migrate lambda syntax in whole project" "true"
 
-val a =
-        fun (): Int {
-            val b =
-                    fun (): Int = 5
+val a = fun (): Int {
+    val b = fun (): Int = 5
 
-            return b()
-        }
\ No newline at end of file
+    return b()
+}
\ No newline at end of file
diff --git a/idea/tests/org/jetbrains/kotlin/formatter/JetFormatterTestGenerated.java b/idea/tests/org/jetbrains/kotlin/formatter/JetFormatterTestGenerated.java
index b35d12a9360..964a54ad4a5 100644
--- a/idea/tests/org/jetbrains/kotlin/formatter/JetFormatterTestGenerated.java
+++ b/idea/tests/org/jetbrains/kotlin/formatter/JetFormatterTestGenerated.java
@@ -256,6 +256,12 @@ public class JetFormatterTestGenerated extends AbstractJetFormatterTest {
             doTest(fileName);
         }
 
+        @TestMetadata("FunctionExpression.after.kt")
+        public void testFunctionExpression() throws Exception {
+            String fileName = JetTestUtils.navigationMetadata("idea/testData/formatter/FunctionExpression.after.kt");
+            doTest(fileName);
+        }
+
         @TestMetadata("FunctionLineBreak.after.kt")
         public void testFunctionLineBreak() throws Exception {
             String fileName = JetTestUtils.navigationMetadata("idea/testData/formatter/FunctionLineBreak.after.kt");