diff --git a/compiler/fir/checkers/src/org/jetbrains/kotlin/fir/analysis/checkers/declaration/FirConflictsChecker.kt b/compiler/fir/checkers/src/org/jetbrains/kotlin/fir/analysis/checkers/declaration/FirConflictsChecker.kt
index 6c21410b410..79366fe886a 100644
--- a/compiler/fir/checkers/src/org/jetbrains/kotlin/fir/analysis/checkers/declaration/FirConflictsChecker.kt
+++ b/compiler/fir/checkers/src/org/jetbrains/kotlin/fir/analysis/checkers/declaration/FirConflictsChecker.kt
@@ -15,7 +15,7 @@ import org.jetbrains.kotlin.fir.analysis.diagnostics.reportOn
 import org.jetbrains.kotlin.fir.declarations.*
 import org.jetbrains.kotlin.fir.declarations.impl.FirOuterClassTypeParameterRef
 import org.jetbrains.kotlin.fir.resolve.firProvider
-import org.jetbrains.kotlin.fir.resolve.getOuterClass
+import org.jetbrains.kotlin.fir.resolve.getContainingDeclaration
 import org.jetbrains.kotlin.fir.scopes.PACKAGE_MEMBER
 import org.jetbrains.kotlin.fir.scopes.impl.FirPackageMemberScope
 import org.jetbrains.kotlin.fir.symbols.FirBasedSymbol
@@ -231,7 +231,7 @@ object FirConflictsChecker : FirBasicDeclarationChecker() {
                     }
                     else -> {
                         val factory = if (conflictingDeclaration is FirClassLikeDeclaration &&
-                            getOuterClass(conflictingDeclaration, context.session) == null &&
+                            conflictingDeclaration.getContainingDeclaration(context.session) == null &&
                             symbols.any { it is FirClassLikeSymbol<*> }
                         ) {
                             FirErrors.PACKAGE_OR_CLASSIFIER_REDECLARATION
diff --git a/compiler/fir/resolve/src/org/jetbrains/kotlin/fir/resolve/ResolveUtils.kt b/compiler/fir/resolve/src/org/jetbrains/kotlin/fir/resolve/ResolveUtils.kt
index 7a6e3ef49ca..4b9906c88f4 100644
--- a/compiler/fir/resolve/src/org/jetbrains/kotlin/fir/resolve/ResolveUtils.kt
+++ b/compiler/fir/resolve/src/org/jetbrains/kotlin/fir/resolve/ResolveUtils.kt
@@ -13,6 +13,7 @@ import org.jetbrains.kotlin.fir.*
 import org.jetbrains.kotlin.fir.declarations.*
 import org.jetbrains.kotlin.fir.declarations.utils.expandedConeType
 import org.jetbrains.kotlin.fir.declarations.utils.isInner
+import org.jetbrains.kotlin.fir.declarations.utils.isLocal
 import org.jetbrains.kotlin.fir.diagnostics.ConeDiagnostic
 import org.jetbrains.kotlin.fir.diagnostics.ConeSimpleDiagnostic
 import org.jetbrains.kotlin.fir.diagnostics.ConeStubDiagnostic
@@ -487,29 +488,32 @@ fun isValidTypeParameterFromOuterClass(
     return containsTypeParameter(classDeclaration)
 }
 
-fun getOuterClassAndActualTypeParametersCount(klass: FirRegularClass, session: FirSession): Pair<FirRegularClass?, Int> {
-    var result = klass.typeParameters.size
+fun FirRegularClass.getActualTypeParametersCount(session: FirSession): Int {
+    var result = typeParameters.size
 
-    if (!klass.isInner) {
-        return Pair(null, result)
+    if (!isInner) {
+        return result
     }
 
-    val outerClass = getOuterClass(klass, session)
-    if (outerClass != null) {
-        result -= outerClass.typeParameters.size
+    val containingClass = getContainingDeclaration(session) as? FirRegularClass
+    if (containingClass != null) {
+        result -= containingClass.typeParameters.size
     }
 
-    return Pair(outerClass, result)
+    return result
 }
 
-fun getOuterClass(klass: FirClassLikeDeclaration, session: FirSession): FirRegularClass? {
-    val classId = klass.symbol.classId
-    val parentId = classId.relativeClassName.parent()
-    if (!parentId.isRoot) {
-        val outerClassId = ClassId(classId.packageFqName, parentId, false)
-        val parentSymbol = session.symbolProvider.getClassLikeSymbolByFqName(outerClassId)
-        return (parentSymbol as? FirRegularClassSymbol)?.fir
+fun FirClassLikeDeclaration.getContainingDeclaration(session: FirSession): FirClassLikeDeclaration? {
+    if (isLocal) {
+        return (this as? FirRegularClass)?.containingClassForLocalAttr?.toFirRegularClass(session)
+    } else {
+        val classId = symbol.classId
+        val parentId = classId.relativeClassName.parent()
+        if (!parentId.isRoot) {
+            val containingDeclarationId = ClassId(classId.packageFqName, parentId, false)
+            return session.symbolProvider.getClassLikeSymbolByFqName(containingDeclarationId)?.fir
+        }
     }
 
     return null
-}
+}
\ No newline at end of file
diff --git a/compiler/fir/resolve/src/org/jetbrains/kotlin/fir/resolve/providers/impl/FirTypeResolverImpl.kt b/compiler/fir/resolve/src/org/jetbrains/kotlin/fir/resolve/providers/impl/FirTypeResolverImpl.kt
index 9852ef0a413..d66533ecc24 100644
--- a/compiler/fir/resolve/src/org/jetbrains/kotlin/fir/resolve/providers/impl/FirTypeResolverImpl.kt
+++ b/compiler/fir/resolve/src/org/jetbrains/kotlin/fir/resolve/providers/impl/FirTypeResolverImpl.kt
@@ -208,8 +208,7 @@ class FirTypeResolverImpl(private val session: FirSession) : FirTypeResolver() {
                                 parameterClass,
                                 index,
                                 symbol,
-                                typeRef,
-                                ignoreOuterClassCheck = true
+                                typeRef
                             )?.let { return it }
                         }
                     }
@@ -242,7 +241,7 @@ class FirTypeResolverImpl(private val session: FirSession) : FirTypeResolver() {
                 currentClass = symbol.fir
             } else {
                 if (currentClass != null) {
-                    currentClass = getOuterClass(currentClass, session)
+                    currentClass = currentClass.getContainingDeclaration(session) as? FirRegularClass
                 }
             }
 
@@ -285,32 +284,21 @@ class FirTypeResolverImpl(private val session: FirSession) : FirTypeResolver() {
         qualifierPartIndex: Int,
         symbol: FirRegularClassSymbol,
         userTypeRef: FirUserTypeRef,
-        qualifierPartArgumentsCount: Int? = null,
-        ignoreOuterClassCheck: Boolean = false
+        qualifierPartArgumentsCount: Int? = null
     ): ConeClassErrorType? {
         // TODO: It should be TYPE_ARGUMENTS_NOT_ALLOWED diagnostics when parameterClass is null
-        val (outerClass, actualTypeParametersCount) = getOuterClassAndActualTypeParametersCount(
-            parameterClass ?: symbol.fir,
-            session
-        )
+        val actualTypeParametersCount = (parameterClass ?: symbol.fir).getActualTypeParametersCount(session)
 
         if (qualifierPartArgumentsCount == null || actualTypeParametersCount != qualifierPartArgumentsCount) {
-            // TODO: fix obtaining outer class for cases like
-            //  https://github.com/JetBrains/kotlin/blob/master/compiler/testData/diagnostics/tests/generics/innerClasses/implicitArguments/fromSuperClassesLocal.kt#L16
-            if (ignoreOuterClassCheck ||
-                (parameterClass != null && parameterClass.classId.relativeClassName.parent().isRoot)
-                || outerClass != null
-            ) {
-                val source = getTypeArgumentsOrNameSource(userTypeRef, qualifierPartIndex)
-                if (source != null) {
-                    return ConeClassErrorType(
-                        ConeWrongNumberOfTypeArgumentsError(
-                            actualTypeParametersCount,
-                            parameterClass?.symbol ?: symbol,
-                            source
-                        )
+            val source = getTypeArgumentsOrNameSource(userTypeRef, qualifierPartIndex)
+            if (source != null) {
+                return ConeClassErrorType(
+                    ConeWrongNumberOfTypeArgumentsError(
+                        actualTypeParametersCount,
+                        parameterClass?.symbol ?: symbol,
+                        source
                     )
-                }
+                )
             }
         }
 
diff --git a/compiler/testData/diagnostics/tests/generics/genericsInType.fir.kt b/compiler/testData/diagnostics/tests/generics/genericsInType.fir.kt
index be6852f4be5..9dddfe2db88 100644
--- a/compiler/testData/diagnostics/tests/generics/genericsInType.fir.kt
+++ b/compiler/testData/diagnostics/tests/generics/genericsInType.fir.kt
@@ -22,7 +22,7 @@ fun test() {
     Foo<String>.Bar::class
     Foo<String>.Bar.Baz::class
 
-    a<Foo<String>.Bar>()
+    a<Foo<String>.<!WRONG_NUMBER_OF_TYPE_ARGUMENTS!>Bar<!>>()
     a<Foo<!WRONG_NUMBER_OF_TYPE_ARGUMENTS!><String><!>.Bar.Baz>()
 
     a<Foo.Bar<Int>>()
@@ -30,7 +30,7 @@ fun test() {
 }
 
 fun <T: Foo<<!UNRESOLVED_REFERENCE!>String.Bar<!>>> x() {}
-fun Foo<String>.Bar.ext() {}
+fun Foo<String>.<!WRONG_NUMBER_OF_TYPE_ARGUMENTS!>Bar<!>.ext() {}
 
 fun ex1(a: Foo<!WRONG_NUMBER_OF_TYPE_ARGUMENTS!><String><!>.Bar<String>): Foo<!WRONG_NUMBER_OF_TYPE_ARGUMENTS!><String><!>.Bar<String> {
 <!NO_RETURN_IN_FUNCTION_WITH_BLOCK_BODY!>}<!>