diff --git a/compiler/frontend/src/org/jetbrains/kotlin/psi/JetFunctionLiteralArgument.kt b/compiler/frontend/src/org/jetbrains/kotlin/psi/JetFunctionLiteralArgument.kt
index 0248deb1d9b..7fbf4262953 100644
--- a/compiler/frontend/src/org/jetbrains/kotlin/psi/JetFunctionLiteralArgument.kt
+++ b/compiler/frontend/src/org/jetbrains/kotlin/psi/JetFunctionLiteralArgument.kt
@@ -21,19 +21,18 @@ import com.intellij.psi.PsiWhiteSpace
 
 public class JetFunctionLiteralArgument(node: ASTNode) : JetValueArgument(node), FunctionLiteralArgument {
 
-    private fun assertFL() = throw AssertionError("Function literal argument doesn't contain function literal expression: " +
-                                                          "${super<JetValueArgument>.getArgumentExpression()?.getText()} (it should be guaranteed by parser)")
+    override fun getArgumentExpression() = super<JetValueArgument>.getArgumentExpression()!!
 
-    override fun getArgumentExpression() = super<JetValueArgument>.getArgumentExpression() ?: assertFL()
-
-    override fun getFunctionLiteral(): JetFunctionLiteralExpression = unpackFunctionLiteral(getArgumentExpression())
-
-    private fun unpackFunctionLiteral(expression: JetExpression?): JetFunctionLiteralExpression =
-            when (expression) {
-                is JetFunctionLiteralExpression -> expression
-                is JetLabeledExpression -> unpackFunctionLiteral(expression.getBaseExpression())
-                is JetAnnotatedExpression -> unpackFunctionLiteral(expression.getBaseExpression())
-                else -> assertFL()
-            }
+    override fun getFunctionLiteral(): JetFunctionLiteralExpression = getArgumentExpression().unpackFunctionLiteral()!!
 }
 
+public fun JetExpression.unpackFunctionLiteral(): JetFunctionLiteralExpression? {
+    return when (this) {
+        is JetFunctionLiteralExpression -> this
+        is JetLabeledExpression -> getBaseExpression()?.unpackFunctionLiteral()
+        is JetAnnotatedExpression -> getBaseExpression()?.unpackFunctionLiteral()
+        else -> null
+    }
+}
+
+
diff --git a/compiler/frontend/src/org/jetbrains/kotlin/psi/createByPattern.kt b/compiler/frontend/src/org/jetbrains/kotlin/psi/createByPattern.kt
index 37a333c60f6..49b4870b03a 100644
--- a/compiler/frontend/src/org/jetbrains/kotlin/psi/createByPattern.kt
+++ b/compiler/frontend/src/org/jetbrains/kotlin/psi/createByPattern.kt
@@ -95,7 +95,10 @@ public fun JetPsiFactory.createExpressionByPattern(pattern: String, vararg args:
     CodeEditUtil.setNodeGeneratedRecursively(expression.getNode(), false)
 
     for ((pointer, n) in pointers) {
-        val element = pointer.getElement()!!
+        var element = pointer.getElement()!!
+        if (element is JetFunctionLiteral) {
+            element = element.getParent() as JetFunctionLiteralExpression
+        }
         element.replace(args[n] as PsiElement)
     }
 
diff --git a/idea/src/org/jetbrains/kotlin/idea/intentions/MoveLambdaOutsideParenthesesIntention.kt b/idea/src/org/jetbrains/kotlin/idea/intentions/MoveLambdaOutsideParenthesesIntention.kt
index 3d547b2f051..ed2b05594b3 100644
--- a/idea/src/org/jetbrains/kotlin/idea/intentions/MoveLambdaOutsideParenthesesIntention.kt
+++ b/idea/src/org/jetbrains/kotlin/idea/intentions/MoveLambdaOutsideParenthesesIntention.kt
@@ -20,7 +20,7 @@ import com.intellij.openapi.editor.Editor
 import org.jetbrains.kotlin.builtins.KotlinBuiltIns
 import org.jetbrains.kotlin.descriptors.FunctionDescriptor
 import org.jetbrains.kotlin.idea.caches.resolve.analyze
-import org.jetbrains.kotlin.idea.util.psiModificationUtil.moveLambdaOutsideParentheses
+import org.jetbrains.kotlin.idea.util.psiModificationUtil.moveFunctionLiteralOutsideParentheses
 import org.jetbrains.kotlin.psi.*
 import org.jetbrains.kotlin.psi.psiUtil.startOffset
 import org.jetbrains.kotlin.resolve.BindingContext
@@ -29,9 +29,10 @@ import org.jetbrains.kotlin.resolve.lazy.BodyResolveMode
 
 public class MoveLambdaOutsideParenthesesIntention : JetSelfTargetingIntention<JetCallExpression>(javaClass(), "Move lambda argument out of parentheses") {
     override fun isApplicableTo(element: JetCallExpression, caretOffset: Int): Boolean {
-        val argument = element.getValueArgumentsInParentheses().lastOrNull() ?: return false
+        if (element.getFunctionLiteralArguments().isNotEmpty()) return false
+        val argument = element.getValueArguments().lastOrNull() ?: return false
         val expression = argument.getArgumentExpression() ?: return false
-        val functionLiteral = getFunctionLiteral(expression) ?: return false
+        val functionLiteral = expression.unpackFunctionLiteral() ?: return false
 
         val callee = element.getCalleeExpression()
         if (callee is JetSimpleNameExpression) {
@@ -54,15 +55,7 @@ public class MoveLambdaOutsideParenthesesIntention : JetSelfTargetingIntention<J
         return !bodyRange.containsInside(caretOffset)
     }
 
-    private fun getFunctionLiteral(expression: JetExpression?): JetFunctionLiteral? {
-        return when (expression) {
-            is JetFunctionLiteralExpression -> expression.getFunctionLiteral()
-            is JetLabeledExpression -> getFunctionLiteral(expression.getBaseExpression())
-            else -> null
-        }
-    }
-
     override fun applyTo(element: JetCallExpression, editor: Editor) {
-        element.moveLambdaOutsideParentheses()
+        element.moveFunctionLiteralOutsideParentheses()
     }
 }
diff --git a/idea/src/org/jetbrains/kotlin/idea/refactoring/changeSignature/usages/JetFunctionCallUsage.java b/idea/src/org/jetbrains/kotlin/idea/refactoring/changeSignature/usages/JetFunctionCallUsage.java
index 2ebaf301ac3..c441b9d62a7 100644
--- a/idea/src/org/jetbrains/kotlin/idea/refactoring/changeSignature/usages/JetFunctionCallUsage.java
+++ b/idea/src/org/jetbrains/kotlin/idea/refactoring/changeSignature/usages/JetFunctionCallUsage.java
@@ -391,8 +391,9 @@ public class JetFunctionCallUsage extends JetUsageInfo<JetCallElement> {
             element.deleteChildRange(KotlinPackage.first(lambdaArguments), KotlinPackage.last(lambdaArguments));
         }
 
+        //TODO: this is not correct!
         JetValueArgument lastArgument = KotlinPackage.lastOrNull(newArgumentList.getArguments());
-        boolean hasTrailingLambdaInArgumentListAfter = lastArgument != null && lastArgument.getArgumentExpression() instanceof JetFunctionLiteralExpression;
+        boolean hasTrailingLambdaInArgumentListAfter = lastArgument != null && PsiPackage.unpackFunctionLiteral(lastArgument.getArgumentExpression()) != null;
 
         arguments = (JetValueArgumentList) arguments.replace(newArgumentList);
 
@@ -430,11 +431,11 @@ public class JetFunctionCallUsage extends JetUsageInfo<JetCallElement> {
         }
 
         if (hasTrailingLambdaInArgumentListAfter) {
-            JetCallElement newCallElement =
-                    (JetCallElement) (newElement instanceof JetQualifiedExpression
+            JetCallExpression newCallExpression =
+                    (JetCallExpression) (newElement instanceof JetQualifiedExpression
                                       ? ((JetQualifiedExpression) newElement).getSelectorExpression()
                                       : newElement);
-            PsiModificationUtilPackage.moveLambdaOutsideParentheses(newCallElement);
+            PsiModificationUtilPackage.moveFunctionLiteralOutsideParentheses(newCallExpression);
         }
     }
 
diff --git a/idea/src/org/jetbrains/kotlin/idea/util/psiModificationUtil.kt b/idea/src/org/jetbrains/kotlin/idea/util/psiModificationUtil.kt
index ad320366ef0..19c3e7f115b 100644
--- a/idea/src/org/jetbrains/kotlin/idea/util/psiModificationUtil.kt
+++ b/idea/src/org/jetbrains/kotlin/idea/util/psiModificationUtil.kt
@@ -54,7 +54,7 @@ fun JetFunctionLiteralArgument.moveInsideParenthesesAndReplaceWith(
         psiFactory.createArgument(replacement)
     }
 
-    val functionLiteralArgument = newCallExpression.getFunctionLiteralArguments().head!!
+    val functionLiteralArgument = newCallExpression.getFunctionLiteralArguments().firstOrNull()!!
     val valueArgumentList = newCallExpression.getValueArgumentList() ?: psiFactory.createCallArguments("()")
 
     valueArgumentList.addArgument(argument)
@@ -69,20 +69,20 @@ fun JetFunctionLiteralArgument.moveInsideParenthesesAndReplaceWith(
     return oldCallExpression.replace(newCallExpression) as JetCallExpression
 }
 
-fun JetCallElement.moveLambdaOutsideParentheses() {
-    val args = getValueArgumentsInParentheses()
-    val functionLiteral = args.last!!.getArgumentExpression()?.getText()
-    val calleeText = getCalleeExpression()?.getText()
-    if (calleeText == null || functionLiteral == null) return
+fun JetCallExpression.moveFunctionLiteralOutsideParentheses() {
+    assert(getFunctionLiteralArguments().isEmpty())
+    val argumentList = getValueArgumentList()!!
+    val argument = argumentList.getArguments().last()
+    val expression = argument.getArgumentExpression()!!
+    assert(expression.unpackFunctionLiteral() != null)
 
-    val params = args.subList(0, args.size - 1).map { it.asElement().getText() ?: "" }.joinToString(", ", "(", ")")
-
-    val newCall =
-            if (params == "()") {
-                "$calleeText $functionLiteral"
-            }
-            else {
-                "$calleeText$params $functionLiteral"
-            }
-    replace(JetPsiFactory(this).createExpression(newCall))
+    val dummyCall = JetPsiFactory(this).createExpressionByPattern("foo()$0={}$", expression) as JetCallExpression
+    val functionLiteralArgument = dummyCall.getFunctionLiteralArguments().single()
+    this.add(functionLiteralArgument)
+    if (argumentList.getArguments().size() > 1) {
+        argumentList.removeArgument(argument)
+    }
+    else {
+        argumentList.delete()
+    }
 }
\ No newline at end of file
diff --git a/idea/testData/intentions/moveLambdaOutsideParentheses/ambigousOverload.kt.after b/idea/testData/intentions/moveLambdaOutsideParentheses/ambigousOverload.kt.after
index 553d7079b70..4582e73279d 100644
--- a/idea/testData/intentions/moveLambdaOutsideParentheses/ambigousOverload.kt.after
+++ b/idea/testData/intentions/moveLambdaOutsideParentheses/ambigousOverload.kt.after
@@ -3,7 +3,7 @@
 // ERROR: Unresolved reference: it
 
 fun foo() {
-    bar <caret>{ it }
+    bar<caret> { it }
 }
 
 fun bar(a: Int = 0, f: (Int) -> Int) { }
diff --git a/idea/testData/intentions/moveLambdaOutsideParentheses/functionalValueCall.kt.after b/idea/testData/intentions/moveLambdaOutsideParentheses/functionalValueCall.kt.after
index d2425d2c89d..c11566bcac9 100644
--- a/idea/testData/intentions/moveLambdaOutsideParentheses/functionalValueCall.kt.after
+++ b/idea/testData/intentions/moveLambdaOutsideParentheses/functionalValueCall.kt.after
@@ -1,3 +1,3 @@
 fun foo(p: (Int, () -> Int) -> Unit) {
-    p(1) <caret>{ 2 }
+    p(1<caret>) { 2 }
 }
diff --git a/idea/testData/intentions/moveLambdaOutsideParentheses/inapplicableAlreadyHasFunctionLiteral.kt b/idea/testData/intentions/moveLambdaOutsideParentheses/inapplicableAlreadyHasFunctionLiteral.kt
new file mode 100644
index 00000000000..ecf6245bccd
--- /dev/null
+++ b/idea/testData/intentions/moveLambdaOutsideParentheses/inapplicableAlreadyHasFunctionLiteral.kt
@@ -0,0 +1,6 @@
+// IS_APPLICABLE: false
+fun foo() {
+    bar(<caret>{ it }) {it}
+}
+
+fun bar(p1: (Int) -> Int, p2: (Int) -> Int) { }
diff --git a/idea/testData/intentions/moveLambdaOutsideParentheses/lambdaWithCommas3.kt.after b/idea/testData/intentions/moveLambdaOutsideParentheses/lambdaWithCommas3.kt.after
index 6587e445215..f7dc6e8fb75 100644
--- a/idea/testData/intentions/moveLambdaOutsideParentheses/lambdaWithCommas3.kt.after
+++ b/idea/testData/intentions/moveLambdaOutsideParentheses/lambdaWithCommas3.kt.after
@@ -3,7 +3,7 @@ fun bar(a: Int, b: Int, f: () -> Unit) {}
 fun foo(a: Int, b: Int) = 2
 
 fun test() {
-    bar(1, 2) {
+    bar(1, 2 /* , , */) {
         val a = foo(1, 2)
     }
 }
\ No newline at end of file
diff --git a/idea/tests/org/jetbrains/kotlin/idea/intentions/IntentionTestGenerated.java b/idea/tests/org/jetbrains/kotlin/idea/intentions/IntentionTestGenerated.java
index 48620a1fb4f..1ff4fb30dba 100644
--- a/idea/tests/org/jetbrains/kotlin/idea/intentions/IntentionTestGenerated.java
+++ b/idea/tests/org/jetbrains/kotlin/idea/intentions/IntentionTestGenerated.java
@@ -4951,6 +4951,12 @@ public class IntentionTestGenerated extends AbstractIntentionTest {
             doTest(fileName);
         }
 
+        @TestMetadata("inapplicableAlreadyHasFunctionLiteral.kt")
+        public void testInapplicableAlreadyHasFunctionLiteral() throws Exception {
+            String fileName = JetTestUtils.navigationMetadata("idea/testData/intentions/moveLambdaOutsideParentheses/inapplicableAlreadyHasFunctionLiteral.kt");
+            doTest(fileName);
+        }
+
         @TestMetadata("inapplicableOptionalParametersAfter.kt")
         public void testInapplicableOptionalParametersAfter() throws Exception {
             String fileName = JetTestUtils.navigationMetadata("idea/testData/intentions/moveLambdaOutsideParentheses/inapplicableOptionalParametersAfter.kt");