diff --git a/idea/src/org/jetbrains/jet/plugin/formatter/KotlinSpacingBuilder.kt b/idea/src/org/jetbrains/jet/plugin/formatter/KotlinSpacingBuilder.kt
index 0fa9933a15b..1624a8b6213 100644
--- a/idea/src/org/jetbrains/jet/plugin/formatter/KotlinSpacingBuilder.kt
+++ b/idea/src/org/jetbrains/jet/plugin/formatter/KotlinSpacingBuilder.kt
@@ -147,8 +147,6 @@ fun createSpacingBuilder(settings: CodeStyleSettings): KotlinSpacingBuilder {
             around(TokenSet.create(PLUSPLUS, MINUSMINUS, EXCLEXCL, MINUS, PLUS, EXCL)).spaceIf(jetCommonSettings.SPACE_AROUND_UNARY_OPERATOR)
             around(RANGE).spaceIf(jetSettings.SPACE_AROUND_RANGE)
 
-            beforeInside(BLOCK, FUN).spaceIf(jetCommonSettings.SPACE_BEFORE_METHOD_LBRACE)
-
             afterInside(LPAR, VALUE_PARAMETER_LIST).spaces(0)
             beforeInside(RPAR, VALUE_PARAMETER_LIST).spaces(0)
             afterInside(LT, TYPE_PARAMETER_LIST).spaces(0)
@@ -233,6 +231,8 @@ fun createSpacingBuilder(settings: CodeStyleSettings): KotlinSpacingBuilder {
             inPosition(parent = CATCH, right = BLOCK).customRule(leftBraceRule)
             inPosition(parent = FINALLY, right = BLOCK).customRule(leftBraceRule)
 
+            inPosition(parent = FUN, right = BLOCK).customRule(leftBraceRule)
+
 
             val spacesInSimpleFunction = if (jetSettings.INSERT_WHITESPACES_IN_SIMPLE_ONE_LINE_METHOD) 1 else 0
             inPosition(parent = FUNCTION_LITERAL,
diff --git a/idea/testData/formatter/DoWhileLineBreak.after.kt b/idea/testData/formatter/DoWhileLineBreak.after.kt
index faf5a5b7a1f..e7b49030143 100644
--- a/idea/testData/formatter/DoWhileLineBreak.after.kt
+++ b/idea/testData/formatter/DoWhileLineBreak.after.kt
@@ -1,4 +1,5 @@
-fun main() {
+fun main()
+{
     do
     {
 
diff --git a/idea/testData/formatter/ForLineBreak.after.kt b/idea/testData/formatter/ForLineBreak.after.kt
index 9c9bfa7c33c..44dbc48cf4d 100644
--- a/idea/testData/formatter/ForLineBreak.after.kt
+++ b/idea/testData/formatter/ForLineBreak.after.kt
@@ -1,4 +1,5 @@
-fun main() {
+fun main()
+{
     for (a in b)
     {
     }
diff --git a/idea/testData/formatter/FunctionLineBreak.after.inv.kt b/idea/testData/formatter/FunctionLineBreak.after.inv.kt
new file mode 100644
index 00000000000..6880dcb4da5
--- /dev/null
+++ b/idea/testData/formatter/FunctionLineBreak.after.inv.kt
@@ -0,0 +1,35 @@
+fun f() {
+}
+
+fun f() {
+}
+
+fun f() {
+}
+
+fun f() //eol comment
+{
+}
+
+fun f() //eol comment
+{
+}
+
+class A {
+    fun f() {
+    }
+
+    fun f() {
+    }
+}
+
+
+fun g() {
+    fun f() {
+    }
+
+    fun f() {
+    }
+}
+
+// SET_TRUE: LBRACE_ON_NEXT_LINE
\ No newline at end of file
diff --git a/idea/testData/formatter/FunctionLineBreak.after.kt b/idea/testData/formatter/FunctionLineBreak.after.kt
new file mode 100644
index 00000000000..9559593186b
--- /dev/null
+++ b/idea/testData/formatter/FunctionLineBreak.after.kt
@@ -0,0 +1,43 @@
+fun f()
+{
+}
+
+fun f()
+{
+}
+
+fun f()
+{
+}
+
+fun f() //eol comment
+{
+}
+
+fun f() //eol comment
+{
+}
+
+class A {
+    fun f()
+    {
+    }
+
+    fun f()
+    {
+    }
+}
+
+
+fun g()
+{
+    fun f()
+    {
+    }
+
+    fun f()
+    {
+    }
+}
+
+// SET_TRUE: LBRACE_ON_NEXT_LINE
\ No newline at end of file
diff --git a/idea/testData/formatter/FunctionLineBreak.kt b/idea/testData/formatter/FunctionLineBreak.kt
new file mode 100644
index 00000000000..87f2a1451b5
--- /dev/null
+++ b/idea/testData/formatter/FunctionLineBreak.kt
@@ -0,0 +1,41 @@
+fun f() {
+}
+
+fun f()
+{
+}
+
+fun f()
+
+{
+}
+
+fun f() //eol comment
+{
+}
+
+fun f() //eol comment
+
+{
+}
+
+class A {
+    fun f() {
+    }
+
+    fun f()
+    {
+    }
+}
+
+
+fun g() {
+    fun f() {
+    }
+
+    fun f()
+    {
+    }
+}
+
+// SET_TRUE: LBRACE_ON_NEXT_LINE
\ No newline at end of file
diff --git a/idea/testData/formatter/FunctionWithNewLineBrace.after.kt b/idea/testData/formatter/FunctionWithNewLineBrace.after.kt
deleted file mode 100644
index 10f601298b1..00000000000
--- a/idea/testData/formatter/FunctionWithNewLineBrace.after.kt
+++ /dev/null
@@ -1,3 +0,0 @@
-fun test()
-{
-}
\ No newline at end of file
diff --git a/idea/testData/formatter/FunctionWithNewLineBrace.kt b/idea/testData/formatter/FunctionWithNewLineBrace.kt
deleted file mode 100644
index 10f601298b1..00000000000
--- a/idea/testData/formatter/FunctionWithNewLineBrace.kt
+++ /dev/null
@@ -1,3 +0,0 @@
-fun test()
-{
-}
\ No newline at end of file
diff --git a/idea/testData/formatter/IfElseWithLineBreak.after.kt b/idea/testData/formatter/IfElseWithLineBreak.after.kt
index ed515aa53ec..82638979522 100644
--- a/idea/testData/formatter/IfElseWithLineBreak.after.kt
+++ b/idea/testData/formatter/IfElseWithLineBreak.after.kt
@@ -1,4 +1,5 @@
-fun main(args: Array<String>) {
+fun main(args: Array<String>)
+{
     if (true)
     {
         false
diff --git a/idea/testData/formatter/IfElseWithTrickyComments.after.inv.kt b/idea/testData/formatter/IfElseWithTrickyComments.after.inv.kt
index b042c0ab740..45b47872549 100644
--- a/idea/testData/formatter/IfElseWithTrickyComments.after.inv.kt
+++ b/idea/testData/formatter/IfElseWithTrickyComments.after.inv.kt
@@ -1,4 +1,5 @@
-fun main(args: Array<String>) {
+fun main(args: Array<String>)
+{
     if (true) // tricky comment
     {
     }
diff --git a/idea/testData/formatter/TryCatchLineBreak.after.kt b/idea/testData/formatter/TryCatchLineBreak.after.kt
index 92347c415a1..913c119a0c2 100644
--- a/idea/testData/formatter/TryCatchLineBreak.after.kt
+++ b/idea/testData/formatter/TryCatchLineBreak.after.kt
@@ -1,4 +1,5 @@
-fun f() {
+fun f()
+{
     try
     {
 
diff --git a/idea/testData/formatter/WhileLineBreak.after.kt b/idea/testData/formatter/WhileLineBreak.after.kt
index 49f0b47a3a0..f6ba8d00564 100644
--- a/idea/testData/formatter/WhileLineBreak.after.kt
+++ b/idea/testData/formatter/WhileLineBreak.after.kt
@@ -1,4 +1,5 @@
-fun main(args: Array<String>) {
+fun main(args: Array<String>)
+{
     while (true)
     {
     }
diff --git a/idea/tests/org/jetbrains/jet/formatter/JetFormatterTestGenerated.java b/idea/tests/org/jetbrains/jet/formatter/JetFormatterTestGenerated.java
index 18ac310b497..dad1b7b687e 100644
--- a/idea/tests/org/jetbrains/jet/formatter/JetFormatterTestGenerated.java
+++ b/idea/tests/org/jetbrains/jet/formatter/JetFormatterTestGenerated.java
@@ -99,16 +99,16 @@ public class JetFormatterTestGenerated extends AbstractJetFormatterTest {
             doTest("idea/testData/formatter/FunctionDefParametersAlign.after.kt");
         }
         
+        @TestMetadata("FunctionLineBreak.after.kt")
+        public void testFunctionLineBreak() throws Exception {
+            doTest("idea/testData/formatter/FunctionLineBreak.after.kt");
+        }
+        
         @TestMetadata("FunctionWithInference.after.kt")
         public void testFunctionWithInference() throws Exception {
             doTest("idea/testData/formatter/FunctionWithInference.after.kt");
         }
         
-        @TestMetadata("FunctionWithNewLineBrace.after.kt")
-        public void testFunctionWithNewLineBrace() throws Exception {
-            doTest("idea/testData/formatter/FunctionWithNewLineBrace.after.kt");
-        }
-        
         @TestMetadata("FunctionalType.after.kt")
         public void testFunctionalType() throws Exception {
             doTest("idea/testData/formatter/FunctionalType.after.kt");
@@ -372,6 +372,11 @@ public class JetFormatterTestGenerated extends AbstractJetFormatterTest {
             doTestInverted("idea/testData/formatter/ForLineBreak.after.inv.kt");
         }
         
+        @TestMetadata("FunctionLineBreak.after.inv.kt")
+        public void testFunctionLineBreak() throws Exception {
+            doTestInverted("idea/testData/formatter/FunctionLineBreak.after.inv.kt");
+        }
+        
         @TestMetadata("FunctionalType.after.inv.kt")
         public void testFunctionalType() throws Exception {
             doTestInverted("idea/testData/formatter/FunctionalType.after.inv.kt");