diff --git a/idea/src/org/jetbrains/jet/plugin/formatter/JetBlock.java b/idea/src/org/jetbrains/jet/plugin/formatter/JetBlock.java
index 0477c51e616..cf99dbb4a29 100644
--- a/idea/src/org/jetbrains/jet/plugin/formatter/JetBlock.java
+++ b/idea/src/org/jetbrains/jet/plugin/formatter/JetBlock.java
@@ -324,6 +324,7 @@ public class JetBlock extends AbstractBlock {
 
             ASTIndentStrategy.forNode("Indent for parts")
                     .in(PROPERTY, FUN)
+                    .notForType(BLOCK)
                     .set(Indent.getContinuationWithoutFirstIndent()),
     };
 
diff --git a/idea/testData/formatter/FunctionWithNewLineBrace.kt b/idea/testData/formatter/FunctionWithNewLineBrace.kt
new file mode 100644
index 00000000000..10f601298b1
--- /dev/null
+++ b/idea/testData/formatter/FunctionWithNewLineBrace.kt
@@ -0,0 +1,3 @@
+fun test()
+{
+}
\ No newline at end of file
diff --git a/idea/testData/formatter/FunctionWithNewLineBrace_after.kt b/idea/testData/formatter/FunctionWithNewLineBrace_after.kt
new file mode 100644
index 00000000000..10f601298b1
--- /dev/null
+++ b/idea/testData/formatter/FunctionWithNewLineBrace_after.kt
@@ -0,0 +1,3 @@
+fun test()
+{
+}
\ No newline at end of file
diff --git a/idea/tests/org/jetbrains/jet/formatter/JetFormatterTest.java b/idea/tests/org/jetbrains/jet/formatter/JetFormatterTest.java
index 5da03038273..ee9fc756d9e 100644
--- a/idea/tests/org/jetbrains/jet/formatter/JetFormatterTest.java
+++ b/idea/tests/org/jetbrains/jet/formatter/JetFormatterTest.java
@@ -60,6 +60,10 @@ public class JetFormatterTest extends AbstractJetFormatterTest {
         doTest();
     }
 
+    public void testFunctionWithNewLineBrace() throws Exception {
+        doTest();
+    }
+
     public void testGetterAndSetter() throws Exception {
         doTest();
     }