diff --git a/compiler/frontend/src/org/jetbrains/kotlin/diagnostics/Errors.java b/compiler/frontend/src/org/jetbrains/kotlin/diagnostics/Errors.java
index 81ed3b21b2d..96f39e7b050 100644
--- a/compiler/frontend/src/org/jetbrains/kotlin/diagnostics/Errors.java
+++ b/compiler/frontend/src/org/jetbrains/kotlin/diagnostics/Errors.java
@@ -329,6 +329,15 @@ public interface Errors {
     DiagnosticFactory2<KtClassOrObject, CallableMemberDescriptor, CallableMemberDescriptor> PROPERTY_TYPE_MISMATCH_ON_INHERITANCE =
             DiagnosticFactory2.create(ERROR, DECLARATION_NAME);
 
+    DiagnosticFactory2<KtClassOrObject, CallableMemberDescriptor, CallableMemberDescriptor> OVERRIDING_FINAL_MEMBER_BY_DELEGATION =
+            DiagnosticFactory2.create(ERROR, DECLARATION_NAME);
+    DiagnosticFactory2<KtClassOrObject, CallableMemberDescriptor, CallableMemberDescriptor> RETURN_TYPE_MISMATCH_ON_OVERRIDE_BY_DELEGATION =
+            DiagnosticFactory2.create(ERROR, DECLARATION_NAME);
+    DiagnosticFactory2<KtClassOrObject, CallableMemberDescriptor, CallableMemberDescriptor> PROPERTY_TYPE_MISMATCH_ON_OVERRIDE_BY_DELEGATION =
+            DiagnosticFactory2.create(ERROR, DECLARATION_NAME);
+    DiagnosticFactory2<KtClassOrObject, CallableMemberDescriptor, CallableMemberDescriptor> VAR_OVERRIDDEN_BY_VAL_BY_DELEGATION =
+            DiagnosticFactory2.create(ERROR, DECLARATION_NAME);
+
     DiagnosticFactory2<KtClassOrObject, KtClassOrObject, CallableMemberDescriptor> ABSTRACT_MEMBER_NOT_IMPLEMENTED =
             DiagnosticFactory2.create(ERROR, DECLARATION_NAME);
     DiagnosticFactory2<KtClassOrObject, KtClassOrObject, CallableMemberDescriptor> ABSTRACT_CLASS_MEMBER_NOT_IMPLEMENTED =
diff --git a/compiler/frontend/src/org/jetbrains/kotlin/diagnostics/rendering/DefaultErrorMessages.java b/compiler/frontend/src/org/jetbrains/kotlin/diagnostics/rendering/DefaultErrorMessages.java
index 3504317d080..c1736a1a028 100644
--- a/compiler/frontend/src/org/jetbrains/kotlin/diagnostics/rendering/DefaultErrorMessages.java
+++ b/compiler/frontend/src/org/jetbrains/kotlin/diagnostics/rendering/DefaultErrorMessages.java
@@ -563,6 +563,15 @@ public class DefaultErrorMessages {
         MAP.put(PROPERTY_TYPE_MISMATCH_ON_INHERITANCE, "''{0}'' clashes with ''{1}'': property types are incompatible",
                 SHORT_NAMES_IN_TYPES, SHORT_NAMES_IN_TYPES);
 
+        MAP.put(OVERRIDING_FINAL_MEMBER_BY_DELEGATION, "''{0}'' implicitly overrides a final member ''{1}'' by delegation",
+                SHORT_NAMES_IN_TYPES, SHORT_NAMES_IN_TYPES);
+        MAP.put(RETURN_TYPE_MISMATCH_ON_OVERRIDE_BY_DELEGATION, "Return type of ''{0}'' doesn't match ''{1}'' implicitly overridden by delegation",
+                SHORT_NAMES_IN_TYPES, SHORT_NAMES_IN_TYPES);
+        MAP.put(PROPERTY_TYPE_MISMATCH_ON_OVERRIDE_BY_DELEGATION, "Property type of ''{0}'' doesn't match ''{1}'' implicitly overridden by delegation",
+                SHORT_NAMES_IN_TYPES, SHORT_NAMES_IN_TYPES);
+        MAP.put(VAR_OVERRIDDEN_BY_VAL_BY_DELEGATION, "val-property ''{0}'' implicitly overrides a var-property ''{1}'' by delegation",
+                SHORT_NAMES_IN_TYPES, SHORT_NAMES_IN_TYPES);
+
         MAP.put(VAR_OVERRIDDEN_BY_VAL, "Var-property {0} cannot be overridden by val-property {1}", FQ_NAMES_IN_TYPES, FQ_NAMES_IN_TYPES);
 
         MAP.put(ABSTRACT_MEMBER_NOT_IMPLEMENTED, "{0} must be declared abstract or implement abstract member {1}", RENDER_CLASS_OR_OBJECT,
diff --git a/compiler/frontend/src/org/jetbrains/kotlin/resolve/OverrideResolver.java b/compiler/frontend/src/org/jetbrains/kotlin/resolve/OverrideResolver.java
index b66b7b6a1dd..0a8c6ff4fb3 100644
--- a/compiler/frontend/src/org/jetbrains/kotlin/resolve/OverrideResolver.java
+++ b/compiler/frontend/src/org/jetbrains/kotlin/resolve/OverrideResolver.java
@@ -25,6 +25,7 @@ import com.intellij.util.SmartList;
 import com.intellij.util.containers.ContainerUtil;
 import com.intellij.util.containers.LinkedMultiMap;
 import com.intellij.util.containers.MultiMap;
+import com.intellij.util.containers.SmartHashSet;
 import com.intellij.util.containers.hash.EqualityPolicy;
 import kotlin.Unit;
 import kotlin.jvm.functions.Function1;
@@ -32,6 +33,8 @@ import org.jetbrains.annotations.NotNull;
 import org.jetbrains.annotations.Nullable;
 import org.jetbrains.annotations.ReadOnly;
 import org.jetbrains.kotlin.descriptors.*;
+import org.jetbrains.kotlin.diagnostics.DiagnosticFactory2;
+import org.jetbrains.kotlin.diagnostics.DiagnosticFactoryWithPsiElement;
 import org.jetbrains.kotlin.incremental.components.NoLookupLocation;
 import org.jetbrains.kotlin.lexer.KtTokens;
 import org.jetbrains.kotlin.name.Name;
@@ -263,144 +266,229 @@ public class OverrideResolver {
             checkOverrideForMember(member);
         }
 
-        // Check if everything that must be overridden, actually is
-        // More than one implementation or no implementations at all
-        final Set<CallableMemberDescriptor> abstractNoImpl = Sets.newLinkedHashSet();
-        final Set<CallableMemberDescriptor> manyImpl = Sets.newLinkedHashSet();
-        final Set<CallableMemberDescriptor> abstractInBaseClassNoImpl = Sets.newLinkedHashSet();
-        final Set<CallableMemberDescriptor> conflictingInterfaceOverrides = Sets.newLinkedHashSet();
+        CollectErrorInformationForInheritedMembersStrategy inheritedMemberErrors =
+                new CollectErrorInformationForInheritedMembersStrategy(klass, classDescriptor);
 
-        checkInheritedSignatures(
-                classDescriptor,
-                new CheckInheritedSignaturesReportingStrategy() {
-                    private boolean returnTypeMismatch = false;
-                    private boolean propertyTypeMismatch = false;
-
-                    @Override
-                    public void abstractMemberNoImpl(CallableMemberDescriptor descriptor) {
-                        abstractNoImpl.add(descriptor);
-                    }
-
-                    @Override
-                    public void abstractBaseClassMemberNoImpl(CallableMemberDescriptor descriptor) {
-                        abstractInBaseClassNoImpl.add(descriptor);
-                    }
-
-                    @Override
-                    public void manyImplMemberNoImpl(CallableMemberDescriptor descriptor) {
-                        manyImpl.add(descriptor);
-                    }
-
-                    @Override
-                    public void conflictingMemberFromInterface(CallableMemberDescriptor descriptor) {
-                        conflictingInterfaceOverrides.add(descriptor);
-                    }
-
-                    @Override
-                    public void clashingWithReturnType(CallableMemberDescriptor descriptor1, CallableMemberDescriptor descriptor2) {
-                        if (!returnTypeMismatch) {
-                            returnTypeMismatch = true;
-                            trace.report(RETURN_TYPE_MISMATCH_ON_INHERITANCE.on(klass, descriptor1, descriptor2));
-                        }
-                    }
-
-                    @Override
-                    public void clashingWithPropertyType(CallableMemberDescriptor descriptor1, CallableMemberDescriptor descriptor2) {
-                        if (!propertyTypeMismatch) {
-                            propertyTypeMismatch = true;
-                            trace.report(PROPERTY_TYPE_MISMATCH_ON_INHERITANCE.on(klass, descriptor1, descriptor2));
-                        }
-                    }
-                });
-
-        if (!classCanHaveAbstractMembers(classDescriptor)) {
-            if (!abstractInBaseClassNoImpl.isEmpty()) {
-                trace.report(ABSTRACT_CLASS_MEMBER_NOT_IMPLEMENTED.on(klass, klass, abstractInBaseClassNoImpl.iterator().next()));
-            }
-            else if (!abstractNoImpl.isEmpty()) {
-                trace.report(ABSTRACT_MEMBER_NOT_IMPLEMENTED.on(klass, klass, abstractNoImpl.iterator().next()));
-            }
-        }
-
-        if (!conflictingInterfaceOverrides.isEmpty()) {
-            trace.report(MANY_INTERFACES_MEMBER_NOT_IMPLEMENTED.on(klass, klass, conflictingInterfaceOverrides.iterator().next()));
-        }
-        else if (!manyImpl.isEmpty()) {
-            trace.report(MANY_IMPL_MEMBER_NOT_IMPLEMENTED.on(klass, klass, manyImpl.iterator().next()));
-        }
+        checkInheritedAndDelegatedSignatures(classDescriptor, inheritedMemberErrors, inheritedMemberErrors);
+        inheritedMemberErrors.doReportErrors();
     }
 
     @NotNull
     public static Set<CallableMemberDescriptor> getMissingImplementations(@NotNull ClassDescriptor classDescriptor) {
         CollectMissingImplementationsStrategy collector = new CollectMissingImplementationsStrategy();
-        checkInheritedSignatures(classDescriptor, collector);
+        checkInheritedAndDelegatedSignatures(classDescriptor, collector, null);
         return collector.shouldImplement;
     }
 
-    private interface CheckInheritedSignaturesReportingStrategy {
-        void abstractMemberNoImpl(CallableMemberDescriptor descriptor);
-        void abstractBaseClassMemberNoImpl(CallableMemberDescriptor descriptor);
-        void manyImplMemberNoImpl(CallableMemberDescriptor descriptor);
-        void conflictingMemberFromInterface(CallableMemberDescriptor descriptor);
-        void clashingWithReturnType(CallableMemberDescriptor descriptor1, CallableMemberDescriptor descriptor2);
-        void clashingWithPropertyType(CallableMemberDescriptor descriptor1, CallableMemberDescriptor descriptor2);
+    private interface CheckInheritedSignaturesReportStrategy {
+        void abstractMemberNotImplemented(CallableMemberDescriptor descriptor);
+        void abstractBaseClassMemberNotImplemented(CallableMemberDescriptor descriptor);
+        void multipleImplementationsMemberNotImplemented(CallableMemberDescriptor descriptor);
+        void conflictingInterfaceMemberNotImplemented(CallableMemberDescriptor descriptor);
+        void returnTypeMismatchOnInheritance(CallableMemberDescriptor descriptor1, CallableMemberDescriptor descriptor2);
+        void propertyTypeMismatchOnInheritance(CallableMemberDescriptor descriptor1, CallableMemberDescriptor descriptor2);
     }
 
-    private static class CollectMissingImplementationsStrategy implements CheckInheritedSignaturesReportingStrategy {
+    private static class CollectMissingImplementationsStrategy implements CheckInheritedSignaturesReportStrategy {
         private Set<CallableMemberDescriptor> shouldImplement = new LinkedHashSet<CallableMemberDescriptor>();
 
         @Override
-        public void abstractMemberNoImpl(CallableMemberDescriptor descriptor) {
+        public void abstractMemberNotImplemented(CallableMemberDescriptor descriptor) {
             shouldImplement.add(descriptor);
         }
 
         @Override
-        public void abstractBaseClassMemberNoImpl(CallableMemberDescriptor descriptor) {
+        public void abstractBaseClassMemberNotImplemented(CallableMemberDescriptor descriptor) {
             // don't care
         }
 
         @Override
-        public void manyImplMemberNoImpl(CallableMemberDescriptor descriptor) {
+        public void multipleImplementationsMemberNotImplemented(CallableMemberDescriptor descriptor) {
             shouldImplement.add(descriptor);
         }
 
         @Override
-        public void conflictingMemberFromInterface(CallableMemberDescriptor descriptor) {
+        public void conflictingInterfaceMemberNotImplemented(CallableMemberDescriptor descriptor) {
             // don't care
         }
 
         @Override
-        public void clashingWithReturnType(CallableMemberDescriptor descriptor1, CallableMemberDescriptor descriptor2) {
+        public void returnTypeMismatchOnInheritance(CallableMemberDescriptor descriptor1, CallableMemberDescriptor descriptor2) {
             // don't care
         }
 
         @Override
-        public void clashingWithPropertyType(CallableMemberDescriptor descriptor1, CallableMemberDescriptor descriptor2) {
+        public void propertyTypeMismatchOnInheritance(CallableMemberDescriptor descriptor1, CallableMemberDescriptor descriptor2) {
             // don't care
         }
     }
 
-    private static void checkInheritedSignatures(
-            @NotNull ClassDescriptor classDescriptor,
-            @NotNull CheckInheritedSignaturesReportingStrategy reportingStrategy
-    ) {
-        for (DeclarationDescriptor member : DescriptorUtils.getAllDescriptors(classDescriptor.getDefaultType().getMemberScope())) {
-            if (member instanceof CallableMemberDescriptor) {
-                checkInheritedSignatures((CallableMemberDescriptor) member, reportingStrategy);
+    private class CollectErrorInformationForInheritedMembersStrategy
+            implements CheckInheritedSignaturesReportStrategy, CheckOverrideReportStrategy {
+        private final KtClassOrObject klass;
+        private final ClassDescriptor classDescriptor;
+
+        private final Set<CallableMemberDescriptor> abstractNoImpl = Sets.newLinkedHashSet();
+        private final Set<CallableMemberDescriptor> multipleImplementations = Sets.newLinkedHashSet();
+        private final Set<CallableMemberDescriptor> abstractInBaseClassNoImpl = Sets.newLinkedHashSet();
+        private final Set<CallableMemberDescriptor> conflictingInterfaceMembers = Sets.newLinkedHashSet();
+        private final Set<CallableMemberDescriptor> conflictingReturnTypes = Sets.newHashSet();
+
+        private final Set<DiagnosticFactoryWithPsiElement> onceErrorsReported = new SmartHashSet<DiagnosticFactoryWithPsiElement>();
+
+        public CollectErrorInformationForInheritedMembersStrategy(
+                @NotNull KtClassOrObject klass,
+                @NotNull ClassDescriptor classDescriptor
+        ) {
+            this.klass = klass;
+            this.classDescriptor = classDescriptor;
+        }
+
+        @Override
+        public void abstractMemberNotImplemented(CallableMemberDescriptor descriptor) {
+            abstractNoImpl.add(descriptor);
+        }
+
+        @Override
+        public void abstractBaseClassMemberNotImplemented(CallableMemberDescriptor descriptor) {
+            abstractInBaseClassNoImpl.add(descriptor);
+        }
+
+        @Override
+        public void multipleImplementationsMemberNotImplemented(CallableMemberDescriptor descriptor) {
+            multipleImplementations.add(descriptor);
+        }
+
+        @Override
+        public void conflictingInterfaceMemberNotImplemented(CallableMemberDescriptor descriptor) {
+            conflictingInterfaceMembers.add(descriptor);
+        }
+
+        @Override
+        public void returnTypeMismatchOnInheritance(CallableMemberDescriptor descriptor1, CallableMemberDescriptor descriptor2) {
+            conflictingReturnTypes.add(descriptor1);
+            conflictingReturnTypes.add(descriptor2);
+
+            reportInheritanceConflictIfRequired(RETURN_TYPE_MISMATCH_ON_INHERITANCE, descriptor1, descriptor2);
+        }
+
+        @Override
+        public void propertyTypeMismatchOnInheritance(CallableMemberDescriptor descriptor1, CallableMemberDescriptor descriptor2) {
+            conflictingReturnTypes.add(descriptor1);
+            conflictingReturnTypes.add(descriptor2);
+
+            reportInheritanceConflictIfRequired(PROPERTY_TYPE_MISMATCH_ON_INHERITANCE, descriptor1, descriptor2);
+        }
+
+        private void reportInheritanceConflictIfRequired(
+                @NotNull DiagnosticFactory2<KtClassOrObject, CallableMemberDescriptor, CallableMemberDescriptor> diagnosticFactory,
+                @NotNull CallableMemberDescriptor descriptor1,
+                @NotNull CallableMemberDescriptor descriptor2
+        ) {
+            if (!onceErrorsReported.contains(diagnosticFactory)) {
+                onceErrorsReported.add(diagnosticFactory);
+                trace.report(diagnosticFactory.on(klass, descriptor1, descriptor2));
+            }
+        }
+
+        @Override
+        public void overridingFinalMember(@NotNull CallableMemberDescriptor overriding, @NotNull CallableMemberDescriptor overridden) {
+            reportDelegationProblemIfRequired(OVERRIDING_FINAL_MEMBER_BY_DELEGATION, overriding, overridden);
+        }
+
+        @Override
+        public void returnTypeMismatchOnOverride(
+                @NotNull CallableMemberDescriptor overriding,
+                @NotNull CallableMemberDescriptor overridden
+        ) {
+            conflictingReturnTypes.add(overridden);
+            reportDelegationProblemIfRequired(RETURN_TYPE_MISMATCH_ON_OVERRIDE_BY_DELEGATION, overriding, overridden);
+        }
+
+        @Override
+        public void propertyTypeMismatchOnOverride(
+                @NotNull CallableMemberDescriptor overriding,
+                @NotNull CallableMemberDescriptor overridden
+        ) {
+            conflictingReturnTypes.add(overridden);
+            reportDelegationProblemIfRequired(PROPERTY_TYPE_MISMATCH_ON_OVERRIDE_BY_DELEGATION, overriding, overridden);
+        }
+
+        @Override
+        public void varOverriddenByVal(@NotNull CallableMemberDescriptor overriding, @NotNull CallableMemberDescriptor overridden) {
+            reportDelegationProblemIfRequired(VAR_OVERRIDDEN_BY_VAL_BY_DELEGATION, overriding, overridden);
+        }
+
+        private void reportDelegationProblemIfRequired(
+                @NotNull DiagnosticFactory2<KtClassOrObject, CallableMemberDescriptor, CallableMemberDescriptor> diagnosticFactory,
+                @NotNull CallableMemberDescriptor delegate,
+                @NotNull CallableMemberDescriptor overridden
+        ) {
+            assert delegate.getKind() == DELEGATION : "Delegate expected, got " + delegate + " of kind " + delegate.getKind();
+
+            if (!onceErrorsReported.contains(diagnosticFactory)) {
+                onceErrorsReported.add(diagnosticFactory);
+                trace.report(diagnosticFactory.on(klass, delegate, overridden));
+            }
+        }
+
+        @Override
+        public void cannotOverrideInvisibleMember(@NotNull CallableMemberDescriptor overriding, @NotNull CallableMemberDescriptor invisibleOverridden) {
+            assert overriding.getKind() == DELEGATION : "Delegate expected, got " + overriding + " of kind " + overriding.getKind();
+            assert overriding.getKind() != DELEGATION : "Delegated member can't override an invisible member; " + invisibleOverridden;
+        }
+
+        @Override
+        public void nothingToOverride(@NotNull CallableMemberDescriptor overriding) {
+            assert overriding.getKind() == DELEGATION : "Delegate expected, got " + overriding + " of kind " + overriding.getKind();
+            assert overriding.getKind() != DELEGATION : "Delegated member can't override nothing; " + overriding;
+        }
+
+        void doReportErrors() {
+            if (!classCanHaveAbstractMembers(classDescriptor)) {
+                if (!abstractInBaseClassNoImpl.isEmpty()) {
+                    trace.report(ABSTRACT_CLASS_MEMBER_NOT_IMPLEMENTED.on(klass, klass, abstractInBaseClassNoImpl.iterator().next()));
+                }
+                else if (!abstractNoImpl.isEmpty()) {
+                    trace.report(ABSTRACT_MEMBER_NOT_IMPLEMENTED.on(klass, klass, abstractNoImpl.iterator().next()));
+                }
+            }
+
+            conflictingInterfaceMembers.removeAll(conflictingReturnTypes);
+            multipleImplementations.removeAll(conflictingReturnTypes);
+            if (!conflictingInterfaceMembers.isEmpty()) {
+                trace.report(MANY_INTERFACES_MEMBER_NOT_IMPLEMENTED.on(klass, klass, conflictingInterfaceMembers.iterator().next()));
+            }
+            else if (!multipleImplementations.isEmpty()) {
+                trace.report(MANY_IMPL_MEMBER_NOT_IMPLEMENTED.on(klass, klass, multipleImplementations.iterator().next()));
             }
         }
     }
 
-    private static void checkInheritedSignatures(
-            @NotNull CallableMemberDescriptor descriptor,
-            @NotNull CheckInheritedSignaturesReportingStrategy reportingStrategy
+    private static void checkInheritedAndDelegatedSignatures(
+            @NotNull ClassDescriptor classDescriptor,
+            @NotNull CheckInheritedSignaturesReportStrategy inheritedReportStrategy,
+            @Nullable CheckOverrideReportStrategy overrideReportStrategyForDelegates
     ) {
-        if (descriptor.getKind().isReal()) return;
+        for (DeclarationDescriptor member : DescriptorUtils.getAllDescriptors(classDescriptor.getDefaultType().getMemberScope())) {
+            if (member instanceof CallableMemberDescriptor) {
+                checkInheritedAndDelegatedSignatures((CallableMemberDescriptor) member, inheritedReportStrategy, overrideReportStrategyForDelegates);
+            }
+        }
+    }
+
+    private static void checkInheritedAndDelegatedSignatures(
+            @NotNull CallableMemberDescriptor descriptor,
+            @NotNull CheckInheritedSignaturesReportStrategy reportingStrategy,
+            @Nullable CheckOverrideReportStrategy overrideReportStrategyForDelegates
+    ) {
+        CallableMemberDescriptor.Kind kind = descriptor.getKind();
+        if (kind != FAKE_OVERRIDE && kind != DELEGATION) return;
         if (descriptor.getVisibility() == Visibilities.INVISIBLE_FAKE) return;
 
         Collection<? extends CallableMemberDescriptor> directOverridden = descriptor.getOverriddenDescriptors();
         if (directOverridden.size() == 0) {
-            throw new IllegalStateException("A 'fake override' " + descriptor.getName().asString() + " must override something");
+            throw new IllegalStateException(kind + " " + descriptor.getName().asString() + " must override something");
         }
 
         // collects map from the directly overridden descriptor to the set of declarations:
@@ -415,39 +503,55 @@ public class OverrideResolver {
         Set<CallableMemberDescriptor> relevantDirectlyOverridden =
                 getRelevantDirectlyOverridden(overriddenDeclarationsByDirectParent, allFilteredOverriddenDeclarations);
 
-        checkInheritedSignaturesForFakeOverride(descriptor, relevantDirectlyOverridden, reportingStrategy);
+        checkInheritedDescriptorsGroup(relevantDirectlyOverridden, reportingStrategy);
 
-        collectJava8MissingOverrides(relevantDirectlyOverridden, reportingStrategy);
+        if (kind == DELEGATION) {
+            if (overrideReportStrategyForDelegates != null) {
+                checkOverridesForMember(descriptor, relevantDirectlyOverridden, overrideReportStrategyForDelegates);
+            }
+        }
+
+        if (kind != DELEGATION) {
+            checkMissingOverridesByJava8Restrictions(descriptor, relevantDirectlyOverridden, reportingStrategy);
+        }
 
         List<CallableMemberDescriptor> implementations = collectImplementations(relevantDirectlyOverridden);
-        if (implementations.size() == 1 && isReturnTypeOkForOverride(descriptor, implementations.get(0))) return;
+
+        int numImplementations = implementations.size();
+
+        if (numImplementations == 1 && isReturnTypeOkForOverride(descriptor, implementations.get(0))) return;
 
         List<CallableMemberDescriptor> abstractOverridden = new ArrayList<CallableMemberDescriptor>(allFilteredOverriddenDeclarations.size());
         List<CallableMemberDescriptor> concreteOverridden = new ArrayList<CallableMemberDescriptor>(allFilteredOverriddenDeclarations.size());
         filterNotSynthesizedDescriptorsByModality(allFilteredOverriddenDeclarations, abstractOverridden, concreteOverridden);
 
-        if (implementations.isEmpty()) {
-            for (CallableMemberDescriptor member : abstractOverridden) {
-                reportingStrategy.abstractMemberNoImpl(member);
+        if (numImplementations == 0) {
+            if (kind != DELEGATION) {
+                for (CallableMemberDescriptor member : abstractOverridden) {
+                    reportingStrategy.abstractMemberNotImplemented(member);
+                }
             }
         }
-        else if (implementations.size() > 1) {
+        else if (numImplementations > 1) {
             for (CallableMemberDescriptor member : concreteOverridden) {
-                reportingStrategy.manyImplMemberNoImpl(member);
+                reportingStrategy.multipleImplementationsMemberNotImplemented(member);
             }
         }
         else {
-            List<CallableMemberDescriptor> membersWithMoreSpecificReturnType =
-                    collectAbstractMethodsWithMoreSpecificReturnType(abstractOverridden, implementations.get(0));
-            for (CallableMemberDescriptor member : membersWithMoreSpecificReturnType) {
-                reportingStrategy.abstractMemberNoImpl(member);
+            if (kind != DELEGATION) {
+                List<CallableMemberDescriptor> membersWithMoreSpecificReturnType =
+                        collectAbstractMethodsWithMoreSpecificReturnType(abstractOverridden, implementations.get(0));
+                for (CallableMemberDescriptor member : membersWithMoreSpecificReturnType) {
+                    reportingStrategy.abstractMemberNotImplemented(member);
+                }
             }
         }
     }
 
-    private static void collectJava8MissingOverrides(
+    private static void checkMissingOverridesByJava8Restrictions(
+            @NotNull CallableMemberDescriptor descriptor,
             @NotNull Set<CallableMemberDescriptor> relevantDirectlyOverridden,
-            @NotNull CheckInheritedSignaturesReportingStrategy reportingStrategy
+            @NotNull CheckInheritedSignaturesReportStrategy reportingStrategy
     ) {
         // Java 8:
         // -- class should implement an abstract member of a super-class,
@@ -479,12 +583,11 @@ public class OverrideResolver {
         }
 
         if (overridesAbstractInBaseClass != null) {
-            reportingStrategy.abstractBaseClassMemberNoImpl(overridesAbstractInBaseClass);
+            reportingStrategy.abstractBaseClassMemberNotImplemented(overridesAbstractInBaseClass);
         }
-
         if (!overridesClassMember && overridesNonAbstractInterfaceMember && overriddenInterfaceMembers.size() > 1) {
             for (CallableMemberDescriptor member : overriddenInterfaceMembers) {
-                reportingStrategy.conflictingMemberFromInterface(member);
+                reportingStrategy.conflictingInterfaceMemberNotImplemented(member);
             }
         }
     }
@@ -634,17 +737,12 @@ public class OverrideResolver {
     }
 
     private interface CheckOverrideReportStrategy {
-        void overridingFinalMember(@NotNull CallableMemberDescriptor overridden);
-
-        void returnTypeMismatchOnOverride(@NotNull CallableMemberDescriptor overridden);
-
-        void propertyTypeMismatchOnOverride(@NotNull CallableMemberDescriptor overridden);
-
-        void varOverriddenByVal(@NotNull CallableMemberDescriptor overridden);
-
-        void cannotOverrideInvisibleMember(@NotNull CallableMemberDescriptor invisibleOverridden);
-
-        void nothingToOverride();
+        void overridingFinalMember(@NotNull CallableMemberDescriptor overriding, @NotNull CallableMemberDescriptor overridden);
+        void returnTypeMismatchOnOverride(@NotNull CallableMemberDescriptor overriding, @NotNull CallableMemberDescriptor overridden);
+        void propertyTypeMismatchOnOverride(@NotNull CallableMemberDescriptor overriding, @NotNull CallableMemberDescriptor overridden);
+        void varOverriddenByVal(@NotNull CallableMemberDescriptor overriding, @NotNull CallableMemberDescriptor overridden);
+        void cannotOverrideInvisibleMember(@NotNull CallableMemberDescriptor overriding, @NotNull CallableMemberDescriptor invisibleOverridden);
+        void nothingToOverride(@NotNull CallableMemberDescriptor overriding);
     }
 
     private void checkOverrideForMember(@NotNull final CallableMemberDescriptor declared) {
@@ -675,7 +773,7 @@ public class OverrideResolver {
                 private boolean kindMismatchError = false;
 
                 @Override
-                public void overridingFinalMember(@NotNull CallableMemberDescriptor overridden) {
+                public void overridingFinalMember(@NotNull CallableMemberDescriptor overriding, @NotNull CallableMemberDescriptor overridden) {
                     if (!finalOverriddenError) {
                         finalOverriddenError = true;
                         trace.report(OVERRIDING_FINAL_MEMBER.on(member, overridden, overridden.getContainingDeclaration()));
@@ -683,7 +781,7 @@ public class OverrideResolver {
                 }
 
                 @Override
-                public void returnTypeMismatchOnOverride(@NotNull CallableMemberDescriptor overridden) {
+                public void returnTypeMismatchOnOverride(@NotNull CallableMemberDescriptor overriding, @NotNull CallableMemberDescriptor overridden) {
                     if (!typeMismatchError) {
                         typeMismatchError = true;
                         trace.report(RETURN_TYPE_MISMATCH_ON_OVERRIDE.on(member, declared, overridden));
@@ -691,7 +789,7 @@ public class OverrideResolver {
                 }
 
                 @Override
-                public void propertyTypeMismatchOnOverride(@NotNull CallableMemberDescriptor overridden) {
+                public void propertyTypeMismatchOnOverride(@NotNull CallableMemberDescriptor overriding, @NotNull CallableMemberDescriptor overridden) {
                     if (!typeMismatchError) {
                         typeMismatchError = true;
                         trace.report(PROPERTY_TYPE_MISMATCH_ON_OVERRIDE.on(member, declared, overridden));
@@ -699,7 +797,7 @@ public class OverrideResolver {
                 }
 
                 @Override
-                public void varOverriddenByVal(@NotNull CallableMemberDescriptor overridden) {
+                public void varOverriddenByVal(@NotNull CallableMemberDescriptor overriding, @NotNull CallableMemberDescriptor overridden) {
                     if (!kindMismatchError) {
                         kindMismatchError = true;
                         trace.report(VAR_OVERRIDDEN_BY_VAL.on(member, (PropertyDescriptor) declared, (PropertyDescriptor) overridden));
@@ -707,12 +805,12 @@ public class OverrideResolver {
                 }
 
                 @Override
-                public void cannotOverrideInvisibleMember(@NotNull CallableMemberDescriptor invisibleOverridden) {
+                public void cannotOverrideInvisibleMember(@NotNull CallableMemberDescriptor overriding, @NotNull CallableMemberDescriptor invisibleOverridden) {
                     trace.report(CANNOT_OVERRIDE_INVISIBLE_MEMBER.on(member, declared, invisibleOverridden));
                 }
 
                 @Override
-                public void nothingToOverride() {
+                public void nothingToOverride(@NotNull CallableMemberDescriptor overriding) {
                     trace.report(NOTHING_TO_OVERRIDE.on(member, declared));
                 }
             });
@@ -723,33 +821,28 @@ public class OverrideResolver {
         }
     }
 
-    private static void checkInheritedSignaturesForFakeOverride(
-            @NotNull CallableMemberDescriptor fakeOverride,
-            @NotNull Collection<CallableMemberDescriptor> relevantDirectlyOverridden,
-            @NotNull CheckInheritedSignaturesReportingStrategy reportingStrategy
+    private static void checkInheritedDescriptorsGroup(
+            @NotNull Collection<CallableMemberDescriptor> inheritedDescriptors,
+            @NotNull CheckInheritedSignaturesReportStrategy reportingStrategy
     ) {
-        assert fakeOverride.getKind() == FAKE_OVERRIDE
-                : "Fake override expected; actual: " + fakeOverride + " of kind " + fakeOverride.getKind();
-
         // FIXME This algorithm depends on transitiveness of sub-typing relation, which is broken in presence of flexible types.
-        // See override/clashesOnInheritance/flexibleReturnType.kt.
-        if (relevantDirectlyOverridden.size() > 1) {
-            Iterator<CallableMemberDescriptor> overriddenIterator = relevantDirectlyOverridden.iterator();
-            CallableMemberDescriptor mostSpecificOverridden = overriddenIterator.next();
-            while (overriddenIterator.hasNext()) {
-                CallableMemberDescriptor overriddenDescriptor = overriddenIterator.next();
-                if (OverridingUtil.isMoreSpecific(overriddenDescriptor, mostSpecificOverridden)) {
-                    mostSpecificOverridden = overriddenDescriptor;
+        if (inheritedDescriptors.size() > 1) {
+            Iterator<CallableMemberDescriptor> inheritedIterator = inheritedDescriptors.iterator();
+            CallableMemberDescriptor mostSpecificInherited = inheritedIterator.next();
+            while (inheritedIterator.hasNext()) {
+                CallableMemberDescriptor overriddenDescriptor = inheritedIterator.next();
+                if (OverridingUtil.isMoreSpecific(overriddenDescriptor, mostSpecificInherited)) {
+                    mostSpecificInherited = overriddenDescriptor;
                 }
             }
 
-            for (CallableMemberDescriptor overriddenDescriptor : relevantDirectlyOverridden) {
-                if (!OverridingUtil.isMoreSpecific(mostSpecificOverridden, overriddenDescriptor)) {
-                    if (overriddenDescriptor instanceof PropertyDescriptor) {
-                        reportingStrategy.clashingWithPropertyType(mostSpecificOverridden, overriddenDescriptor);
+            for (CallableMemberDescriptor inheritedDescriptor : inheritedDescriptors) {
+                if (!OverridingUtil.isMoreSpecific(mostSpecificInherited, inheritedDescriptor)) {
+                    if (inheritedDescriptor instanceof PropertyDescriptor) {
+                        reportingStrategy.propertyTypeMismatchOnInheritance(mostSpecificInherited, inheritedDescriptor);
                     }
                     else {
-                        reportingStrategy.clashingWithReturnType(mostSpecificOverridden, overriddenDescriptor);
+                        reportingStrategy.returnTypeMismatchOnInheritance(mostSpecificInherited, inheritedDescriptor);
                     }
                 }
             }
@@ -763,25 +856,7 @@ public class OverrideResolver {
     ) {
         Collection<? extends CallableMemberDescriptor> overriddenDescriptors = declared.getOverriddenDescriptors();
 
-        for (CallableMemberDescriptor overridden : overriddenDescriptors) {
-            if (overridden == null) continue;
-
-            if (!overridden.getModality().isOverridable()) {
-                reportError.overridingFinalMember(overridden);
-            }
-
-            if (declared instanceof PropertyDescriptor &&
-                !isPropertyTypeOkForOverride((PropertyDescriptor) overridden, (PropertyDescriptor) declared)) {
-                reportError.propertyTypeMismatchOnOverride(overridden);
-            }
-            else if (!isReturnTypeOkForOverride(overridden, declared)) {
-                reportError.returnTypeMismatchOnOverride(overridden);
-            }
-
-            if (checkPropertyKind(overridden, true) && checkPropertyKind(declared, false)) {
-                reportError.varOverriddenByVal(overridden);
-            }
-        }
+        checkOverridesForMember(declared, overriddenDescriptors, reportError);
 
         if (checkIfOverridesNothing && overriddenDescriptors.isEmpty()) {
             DeclarationDescriptor containingDeclaration = declared.getContainingDeclaration();
@@ -790,10 +865,36 @@ public class OverrideResolver {
 
             CallableMemberDescriptor invisibleOverriddenDescriptor = findInvisibleOverriddenDescriptor(declared, declaringClass);
             if (invisibleOverriddenDescriptor != null) {
-                reportError.cannotOverrideInvisibleMember(invisibleOverriddenDescriptor);
+                reportError.cannotOverrideInvisibleMember(declared, invisibleOverriddenDescriptor);
             }
             else {
-                reportError.nothingToOverride();
+                reportError.nothingToOverride(declared);
+            }
+        }
+    }
+
+    private static void checkOverridesForMember(
+            CallableMemberDescriptor memberDescriptor,
+            Collection<? extends CallableMemberDescriptor> overriddenDescriptors,
+            @NotNull CheckOverrideReportStrategy reportError
+    ) {
+        for (CallableMemberDescriptor overridden : overriddenDescriptors) {
+            if (overridden == null) continue;
+
+            if (!overridden.getModality().isOverridable()) {
+                reportError.overridingFinalMember(memberDescriptor, overridden);
+            }
+
+            if (memberDescriptor instanceof PropertyDescriptor &&
+                !isPropertyTypeOkForOverride((PropertyDescriptor) overridden, (PropertyDescriptor) memberDescriptor)) {
+                reportError.propertyTypeMismatchOnOverride(memberDescriptor, overridden);
+            }
+            else if (!isReturnTypeOkForOverride(overridden, memberDescriptor)) {
+                reportError.returnTypeMismatchOnOverride(memberDescriptor, overridden);
+            }
+
+            if (checkPropertyKind(overridden, true) && checkPropertyKind(memberDescriptor, false)) {
+                reportError.varOverriddenByVal(memberDescriptor, overridden);
             }
         }
     }
@@ -855,7 +956,7 @@ public class OverrideResolver {
             private boolean overrideConflict = false;
 
             @Override
-            public void overridingFinalMember(@NotNull CallableMemberDescriptor overridden) {
+            public void overridingFinalMember(@NotNull CallableMemberDescriptor overriding, @NotNull CallableMemberDescriptor overridden) {
                 if (!overrideConflict) {
                     overrideConflict = true;
                     trace.report(DATA_CLASS_OVERRIDE_CONFLICT.on(dataModifier, componentFunction, overridden.getContainingDeclaration()));
@@ -863,7 +964,7 @@ public class OverrideResolver {
             }
 
             @Override
-            public void returnTypeMismatchOnOverride(@NotNull CallableMemberDescriptor overridden) {
+            public void returnTypeMismatchOnOverride(@NotNull CallableMemberDescriptor overriding, @NotNull CallableMemberDescriptor overridden) {
                 if (!overrideConflict) {
                     overrideConflict = true;
                     trace.report(DATA_CLASS_OVERRIDE_CONFLICT.on(dataModifier, componentFunction, overridden.getContainingDeclaration()));
@@ -871,22 +972,22 @@ public class OverrideResolver {
             }
 
             @Override
-            public void propertyTypeMismatchOnOverride(@NotNull CallableMemberDescriptor overridden) {
+            public void propertyTypeMismatchOnOverride(@NotNull CallableMemberDescriptor overriding, @NotNull CallableMemberDescriptor overridden) {
                 throw new IllegalStateException("Component functions are not properties");
             }
 
             @Override
-            public void varOverriddenByVal(@NotNull CallableMemberDescriptor overridden) {
+            public void varOverriddenByVal(@NotNull CallableMemberDescriptor overriding, @NotNull CallableMemberDescriptor overridden) {
                 throw new IllegalStateException("Component functions are not properties");
             }
 
             @Override
-            public void cannotOverrideInvisibleMember(@NotNull CallableMemberDescriptor invisibleOverridden) {
+            public void cannotOverrideInvisibleMember(@NotNull CallableMemberDescriptor overriding, @NotNull CallableMemberDescriptor invisibleOverridden) {
                 throw new IllegalStateException("CANNOT_OVERRIDE_INVISIBLE_MEMBER should be reported on the corresponding property");
             }
 
             @Override
-            public void nothingToOverride() {
+            public void nothingToOverride(@NotNull CallableMemberDescriptor overriding) {
                 throw new IllegalStateException("Component functions are OK to override nothing");
             }
         });
diff --git a/compiler/testData/diagnostics/tests/delegation/Delegation_ClashingFunctions.kt b/compiler/testData/diagnostics/tests/delegation/Delegation_ClashingFunctions.kt
index 906b40675ab..ccdb6191d74 100644
--- a/compiler/testData/diagnostics/tests/delegation/Delegation_ClashingFunctions.kt
+++ b/compiler/testData/diagnostics/tests/delegation/Delegation_ClashingFunctions.kt
@@ -10,9 +10,9 @@ interface Three {
     public fun foo(): String
 }
 
-<!MANY_IMPL_MEMBER_NOT_IMPLEMENTED, MANY_IMPL_MEMBER_NOT_IMPLEMENTED!>class Test123<!>(val v1: One, val v2: Two, val v3: Three) : One by v1, Two by v2, Three by v3 { }
-<!MANY_IMPL_MEMBER_NOT_IMPLEMENTED, MANY_IMPL_MEMBER_NOT_IMPLEMENTED!>class Test132<!>(val v1: One, val v2: Two, val v3: Three) : One by v1, Three by v3, Two by v2 { }
+<!MANY_IMPL_MEMBER_NOT_IMPLEMENTED, MANY_IMPL_MEMBER_NOT_IMPLEMENTED, RETURN_TYPE_MISMATCH_ON_OVERRIDE_BY_DELEGATION!>class Test123<!>(val v1: One, val v2: Two, val v3: Three) : One by v1, Two by v2, Three by v3 { }
+<!MANY_IMPL_MEMBER_NOT_IMPLEMENTED, MANY_IMPL_MEMBER_NOT_IMPLEMENTED, RETURN_TYPE_MISMATCH_ON_OVERRIDE_BY_DELEGATION!>class Test132<!>(val v1: One, val v2: Two, val v3: Three) : One by v1, Three by v3, Two by v2 { }
 <!MANY_IMPL_MEMBER_NOT_IMPLEMENTED, MANY_IMPL_MEMBER_NOT_IMPLEMENTED!>class Test312<!>(val v1: One, val v2: Two, val v3: Three) : Three by v3, One by v1, Two by v2 { }
 <!MANY_IMPL_MEMBER_NOT_IMPLEMENTED, MANY_IMPL_MEMBER_NOT_IMPLEMENTED!>class Test321<!>(val v1: One, val v2: Two, val v3: Three) : Three by v3, Two by v2, One by v1 { }
-<!MANY_IMPL_MEMBER_NOT_IMPLEMENTED, MANY_IMPL_MEMBER_NOT_IMPLEMENTED!>class Test231<!>(val v1: One, val v2: Two, val v3: Three) : Two by v2, Three by v3, One by v1 { }
-<!MANY_IMPL_MEMBER_NOT_IMPLEMENTED, MANY_IMPL_MEMBER_NOT_IMPLEMENTED!>class Test213<!>(val v1: One, val v2: Two, val v3: Three) : Two by v2, One by v1, Three by v3 { }
\ No newline at end of file
+<!MANY_IMPL_MEMBER_NOT_IMPLEMENTED, MANY_IMPL_MEMBER_NOT_IMPLEMENTED, RETURN_TYPE_MISMATCH_ON_OVERRIDE_BY_DELEGATION!>class Test231<!>(val v1: One, val v2: Two, val v3: Three) : Two by v2, Three by v3, One by v1 { }
+<!MANY_IMPL_MEMBER_NOT_IMPLEMENTED, MANY_IMPL_MEMBER_NOT_IMPLEMENTED, RETURN_TYPE_MISMATCH_ON_OVERRIDE_BY_DELEGATION!>class Test213<!>(val v1: One, val v2: Two, val v3: Three) : Two by v2, One by v1, Three by v3 { }
\ No newline at end of file
diff --git a/compiler/testData/diagnostics/tests/delegation/clashes/returnTypeMismatch.kt b/compiler/testData/diagnostics/tests/delegation/clashes/returnTypeMismatch.kt
new file mode 100644
index 00000000000..be2f34ead7e
--- /dev/null
+++ b/compiler/testData/diagnostics/tests/delegation/clashes/returnTypeMismatch.kt
@@ -0,0 +1,44 @@
+interface IStr {
+    fun foo(): String
+}
+
+class CStr : IStr {
+    override fun foo(): String = ""
+}
+
+interface IInt {
+    fun foo(): Int
+}
+
+class CInt : IInt {
+    override fun foo(): Int = 42
+}
+
+interface IGeneric<T> {
+    fun foo(): T
+}
+
+class CGeneric<T> : IGeneric<T> {
+    override fun foo(): T {
+        throw UnsupportedOperationException()
+    }
+}
+
+abstract <!RETURN_TYPE_MISMATCH_ON_INHERITANCE, RETURN_TYPE_MISMATCH_ON_OVERRIDE_BY_DELEGATION!>class Test1<!> : IStr by CStr(), IInt
+
+abstract <!RETURN_TYPE_MISMATCH_ON_INHERITANCE, RETURN_TYPE_MISMATCH_ON_OVERRIDE_BY_DELEGATION!>class Test2<!> : IStr, IInt by CInt()
+
+abstract <!MANY_IMPL_MEMBER_NOT_IMPLEMENTED, RETURN_TYPE_MISMATCH_ON_INHERITANCE, RETURN_TYPE_MISMATCH_ON_OVERRIDE_BY_DELEGATION!>class Test3<!> : IStr by CStr(), IInt by CInt()
+
+abstract class Test4 : IStr by CStr(), IGeneric<String>
+
+abstract class Test5 : IStr by CStr(), IGeneric<Any>
+
+abstract <!RETURN_TYPE_MISMATCH_ON_INHERITANCE, RETURN_TYPE_MISMATCH_ON_OVERRIDE_BY_DELEGATION!>class Test6<!> : IStr by CStr(), IGeneric<Int>
+
+abstract class Test7 : IGeneric<String> by CGeneric<String>(), IStr
+
+abstract <!RETURN_TYPE_MISMATCH_ON_INHERITANCE, RETURN_TYPE_MISMATCH_ON_OVERRIDE_BY_DELEGATION!>class Test8<!> : IGeneric<String> by CGeneric<String>(), IInt
+
+// Can't test right now due to https://youtrack.jetbrains.com/issue/KT-10258
+// abstract class Test9 : IGeneric<String> by CGeneric<String>(), IGeneric<Int>
diff --git a/compiler/testData/diagnostics/tests/delegation/clashes/returnTypeMismatch.txt b/compiler/testData/diagnostics/tests/delegation/clashes/returnTypeMismatch.txt
new file mode 100644
index 00000000000..5939064ca10
--- /dev/null
+++ b/compiler/testData/diagnostics/tests/delegation/clashes/returnTypeMismatch.txt
@@ -0,0 +1,110 @@
+package
+
+public final class CGeneric</*0*/ T> : IGeneric<T> {
+    public constructor CGeneric</*0*/ T>()
+    public open override /*1*/ /*fake_override*/ fun equals(/*0*/ other: kotlin.Any?): kotlin.Boolean
+    public open override /*1*/ fun foo(): T
+    public open override /*1*/ /*fake_override*/ fun hashCode(): kotlin.Int
+    public open override /*1*/ /*fake_override*/ fun toString(): kotlin.String
+}
+
+public final class CInt : IInt {
+    public constructor CInt()
+    public open override /*1*/ /*fake_override*/ fun equals(/*0*/ other: kotlin.Any?): kotlin.Boolean
+    public open override /*1*/ fun foo(): kotlin.Int
+    public open override /*1*/ /*fake_override*/ fun hashCode(): kotlin.Int
+    public open override /*1*/ /*fake_override*/ fun toString(): kotlin.String
+}
+
+public final class CStr : IStr {
+    public constructor CStr()
+    public open override /*1*/ /*fake_override*/ fun equals(/*0*/ other: kotlin.Any?): kotlin.Boolean
+    public open override /*1*/ fun foo(): kotlin.String
+    public open override /*1*/ /*fake_override*/ fun hashCode(): kotlin.Int
+    public open override /*1*/ /*fake_override*/ fun toString(): kotlin.String
+}
+
+public interface IGeneric</*0*/ T> {
+    public open override /*1*/ /*fake_override*/ fun equals(/*0*/ other: kotlin.Any?): kotlin.Boolean
+    public abstract fun foo(): T
+    public open override /*1*/ /*fake_override*/ fun hashCode(): kotlin.Int
+    public open override /*1*/ /*fake_override*/ fun toString(): kotlin.String
+}
+
+public interface IInt {
+    public open override /*1*/ /*fake_override*/ fun equals(/*0*/ other: kotlin.Any?): kotlin.Boolean
+    public abstract fun foo(): kotlin.Int
+    public open override /*1*/ /*fake_override*/ fun hashCode(): kotlin.Int
+    public open override /*1*/ /*fake_override*/ fun toString(): kotlin.String
+}
+
+public interface IStr {
+    public open override /*1*/ /*fake_override*/ fun equals(/*0*/ other: kotlin.Any?): kotlin.Boolean
+    public abstract fun foo(): kotlin.String
+    public open override /*1*/ /*fake_override*/ fun hashCode(): kotlin.Int
+    public open override /*1*/ /*fake_override*/ fun toString(): kotlin.String
+}
+
+public abstract class Test1 : IStr, IInt {
+    public constructor Test1()
+    public open override /*2*/ /*fake_override*/ fun equals(/*0*/ other: kotlin.Any?): kotlin.Boolean
+    public open override /*2*/ /*delegation*/ fun foo(): kotlin.String
+    public open override /*2*/ /*fake_override*/ fun hashCode(): kotlin.Int
+    public open override /*2*/ /*fake_override*/ fun toString(): kotlin.String
+}
+
+public abstract class Test2 : IStr, IInt {
+    public constructor Test2()
+    public open override /*2*/ /*fake_override*/ fun equals(/*0*/ other: kotlin.Any?): kotlin.Boolean
+    public open override /*2*/ /*delegation*/ fun foo(): kotlin.Int
+    public open override /*2*/ /*fake_override*/ fun hashCode(): kotlin.Int
+    public open override /*2*/ /*fake_override*/ fun toString(): kotlin.String
+}
+
+public abstract class Test3 : IStr, IInt {
+    public constructor Test3()
+    public open override /*2*/ /*fake_override*/ fun equals(/*0*/ other: kotlin.Any?): kotlin.Boolean
+    public open override /*2*/ /*delegation*/ fun foo(): kotlin.String
+    public open override /*2*/ /*fake_override*/ fun hashCode(): kotlin.Int
+    public open override /*2*/ /*fake_override*/ fun toString(): kotlin.String
+}
+
+public abstract class Test4 : IStr, IGeneric<kotlin.String> {
+    public constructor Test4()
+    public open override /*2*/ /*fake_override*/ fun equals(/*0*/ other: kotlin.Any?): kotlin.Boolean
+    public open override /*2*/ /*delegation*/ fun foo(): kotlin.String
+    public open override /*2*/ /*fake_override*/ fun hashCode(): kotlin.Int
+    public open override /*2*/ /*fake_override*/ fun toString(): kotlin.String
+}
+
+public abstract class Test5 : IStr, IGeneric<kotlin.Any> {
+    public constructor Test5()
+    public open override /*2*/ /*fake_override*/ fun equals(/*0*/ other: kotlin.Any?): kotlin.Boolean
+    public open override /*2*/ /*delegation*/ fun foo(): kotlin.String
+    public open override /*2*/ /*fake_override*/ fun hashCode(): kotlin.Int
+    public open override /*2*/ /*fake_override*/ fun toString(): kotlin.String
+}
+
+public abstract class Test6 : IStr, IGeneric<kotlin.Int> {
+    public constructor Test6()
+    public open override /*2*/ /*fake_override*/ fun equals(/*0*/ other: kotlin.Any?): kotlin.Boolean
+    public open override /*2*/ /*delegation*/ fun foo(): kotlin.String
+    public open override /*2*/ /*fake_override*/ fun hashCode(): kotlin.Int
+    public open override /*2*/ /*fake_override*/ fun toString(): kotlin.String
+}
+
+public abstract class Test7 : IGeneric<kotlin.String>, IStr {
+    public constructor Test7()
+    public open override /*2*/ /*fake_override*/ fun equals(/*0*/ other: kotlin.Any?): kotlin.Boolean
+    public open override /*2*/ /*delegation*/ fun foo(): kotlin.String
+    public open override /*2*/ /*fake_override*/ fun hashCode(): kotlin.Int
+    public open override /*2*/ /*fake_override*/ fun toString(): kotlin.String
+}
+
+public abstract class Test8 : IGeneric<kotlin.String>, IInt {
+    public constructor Test8()
+    public open override /*2*/ /*fake_override*/ fun equals(/*0*/ other: kotlin.Any?): kotlin.Boolean
+    public open override /*2*/ /*delegation*/ fun foo(): kotlin.String
+    public open override /*2*/ /*fake_override*/ fun hashCode(): kotlin.Int
+    public open override /*2*/ /*fake_override*/ fun toString(): kotlin.String
+}
diff --git a/compiler/testData/diagnostics/tests/j+k/collectionOverrides/irrelevantImplMutableListKotlin.txt b/compiler/testData/diagnostics/tests/j+k/collectionOverrides/irrelevantImplMutableListKotlin.txt
index 450e5a6a32d..154d693a1cc 100644
--- a/compiler/testData/diagnostics/tests/j+k/collectionOverrides/irrelevantImplMutableListKotlin.txt
+++ b/compiler/testData/diagnostics/tests/j+k/collectionOverrides/irrelevantImplMutableListKotlin.txt
@@ -13,7 +13,7 @@ public open class A : AImpl, kotlin.MutableList<kotlin.String!> {
     public final override /*2*/ /*fake_override*/ fun contains(/*0*/ element: kotlin.String!): kotlin.Boolean
     public final override /*2*/ /*fake_override*/ fun containsAll(/*0*/ elements: kotlin.Collection<kotlin.String!>): kotlin.Boolean
     public open override /*2*/ /*fake_override*/ fun equals(/*0*/ other: kotlin.Any?): kotlin.Boolean
-    public final override /*2*/ /*fake_override*/ fun get(/*0*/ index: kotlin.Int): kotlin.String!
+    public final override /*2*/ /*fake_override*/ fun get(/*0*/ index: kotlin.Int): kotlin.String
     public open override /*2*/ /*fake_override*/ fun hashCode(): kotlin.Int
     public final override /*2*/ /*fake_override*/ fun indexOf(/*0*/ element: kotlin.String!): kotlin.Int
     public final override /*2*/ /*fake_override*/ fun isEmpty(): kotlin.Boolean
@@ -25,7 +25,7 @@ public open class A : AImpl, kotlin.MutableList<kotlin.String!> {
     public final override /*2*/ /*fake_override*/ fun removeAll(/*0*/ elements: kotlin.Collection<kotlin.String!>): kotlin.Boolean
     public final override /*2*/ /*fake_override*/ fun removeAt(/*0*/ index: kotlin.Int): kotlin.String
     public final override /*2*/ /*fake_override*/ fun retainAll(/*0*/ elements: kotlin.Collection<kotlin.String!>): kotlin.Boolean
-    public final override /*2*/ /*fake_override*/ fun set(/*0*/ index: kotlin.Int, /*1*/ element: kotlin.String!): kotlin.String!
+    public final override /*2*/ /*fake_override*/ fun set(/*0*/ index: kotlin.Int, /*1*/ element: kotlin.String): kotlin.String
     public final override /*2*/ /*fake_override*/ fun subList(/*0*/ fromIndex: kotlin.Int, /*1*/ toIndex: kotlin.Int): kotlin.MutableList<kotlin.String!>
     public open override /*2*/ /*fake_override*/ fun toString(): kotlin.String
 }
@@ -69,7 +69,7 @@ public final class X : A {
     public final override /*1*/ /*fake_override*/ fun contains(/*0*/ element: kotlin.String!): kotlin.Boolean
     public final override /*1*/ /*fake_override*/ fun containsAll(/*0*/ elements: kotlin.Collection<kotlin.String!>): kotlin.Boolean
     public open override /*1*/ /*fake_override*/ fun equals(/*0*/ other: kotlin.Any?): kotlin.Boolean
-    public final override /*1*/ /*fake_override*/ fun get(/*0*/ index: kotlin.Int): kotlin.String!
+    public final override /*1*/ /*fake_override*/ fun get(/*0*/ index: kotlin.Int): kotlin.String
     public open override /*1*/ /*fake_override*/ fun hashCode(): kotlin.Int
     public final override /*1*/ /*fake_override*/ fun indexOf(/*0*/ element: kotlin.String!): kotlin.Int
     public final override /*1*/ /*fake_override*/ fun isEmpty(): kotlin.Boolean
@@ -81,7 +81,7 @@ public final class X : A {
     public final override /*1*/ /*fake_override*/ fun removeAll(/*0*/ elements: kotlin.Collection<kotlin.String!>): kotlin.Boolean
     public final override /*1*/ /*fake_override*/ fun removeAt(/*0*/ index: kotlin.Int): kotlin.String
     public final override /*1*/ /*fake_override*/ fun retainAll(/*0*/ elements: kotlin.Collection<kotlin.String!>): kotlin.Boolean
-    public final override /*1*/ /*fake_override*/ fun set(/*0*/ index: kotlin.Int, /*1*/ element: kotlin.String!): kotlin.String!
+    public final override /*1*/ /*fake_override*/ fun set(/*0*/ index: kotlin.Int, /*1*/ element: kotlin.String): kotlin.String
     public final override /*1*/ /*fake_override*/ fun subList(/*0*/ fromIndex: kotlin.Int, /*1*/ toIndex: kotlin.Int): kotlin.MutableList<kotlin.String!>
     public open override /*1*/ /*fake_override*/ fun toString(): kotlin.String
 }
diff --git a/compiler/testData/diagnostics/tests/j+k/collectionOverrides/removeAt.txt b/compiler/testData/diagnostics/tests/j+k/collectionOverrides/removeAt.txt
index 6fdc4198820..660bb1265c6 100644
--- a/compiler/testData/diagnostics/tests/j+k/collectionOverrides/removeAt.txt
+++ b/compiler/testData/diagnostics/tests/j+k/collectionOverrides/removeAt.txt
@@ -53,7 +53,7 @@ public abstract class B</*0*/ T> : kotlin.MutableList<T>, java.util.AbstractList
     public open override /*2*/ /*fake_override*/ fun contains(/*0*/ element: T!): kotlin.Boolean
     public open override /*2*/ /*fake_override*/ fun containsAll(/*0*/ elements: kotlin.Collection<T!>): kotlin.Boolean
     public open override /*2*/ /*fake_override*/ fun equals(/*0*/ other: kotlin.Any?): kotlin.Boolean
-    public abstract override /*2*/ /*fake_override*/ fun get(/*0*/ index: kotlin.Int): T!
+    public abstract override /*2*/ /*fake_override*/ fun get(/*0*/ index: kotlin.Int): T
     public open override /*2*/ /*fake_override*/ fun hashCode(): kotlin.Int
     public open override /*2*/ /*fake_override*/ fun indexOf(/*0*/ element: T!): kotlin.Int
     public open override /*2*/ /*fake_override*/ fun isEmpty(): kotlin.Boolean
@@ -68,7 +68,7 @@ public abstract class B</*0*/ T> : kotlin.MutableList<T>, java.util.AbstractList
     public open override /*2*/ fun removeAt(/*0*/ index: kotlin.Int): T
     protected/*protected and package*/ open override /*1*/ /*fake_override*/ fun removeRange(/*0*/ p0: kotlin.Int, /*1*/ p1: kotlin.Int): kotlin.Unit
     public open override /*2*/ /*fake_override*/ fun retainAll(/*0*/ elements: kotlin.Collection<T!>): kotlin.Boolean
-    public open override /*2*/ /*fake_override*/ fun set(/*0*/ index: kotlin.Int, /*1*/ element: T!): T!
+    public open override /*2*/ /*fake_override*/ fun set(/*0*/ index: kotlin.Int, /*1*/ element: T): T
     public open override /*2*/ /*fake_override*/ fun subList(/*0*/ fromIndex: kotlin.Int, /*1*/ toIndex: kotlin.Int): kotlin.MutableList<T!>
     public open override /*1*/ /*fake_override*/ fun toArray(): kotlin.Array<(out) kotlin.Any!>!
     public open override /*1*/ /*fake_override*/ fun </*0*/ T : kotlin.Any!> toArray(/*0*/ p0: kotlin.Array<(out) T!>!): kotlin.Array<(out) T!>!
diff --git a/compiler/testData/diagnostics/tests/j+k/collectionOverrides/removeAtInt.txt b/compiler/testData/diagnostics/tests/j+k/collectionOverrides/removeAtInt.txt
index f968511bd8d..ae448a51a73 100644
--- a/compiler/testData/diagnostics/tests/j+k/collectionOverrides/removeAtInt.txt
+++ b/compiler/testData/diagnostics/tests/j+k/collectionOverrides/removeAtInt.txt
@@ -14,7 +14,7 @@ public abstract class A : B {
     public open override /*1*/ /*fake_override*/ fun contains(/*0*/ element: kotlin.Int!): kotlin.Boolean
     public open override /*1*/ /*fake_override*/ fun containsAll(/*0*/ elements: kotlin.Collection<kotlin.Int!>): kotlin.Boolean
     public open override /*1*/ /*fake_override*/ fun equals(/*0*/ other: kotlin.Any?): kotlin.Boolean
-    public abstract override /*1*/ /*fake_override*/ fun get(/*0*/ index: kotlin.Int): kotlin.Int!
+    public abstract override /*1*/ /*fake_override*/ fun get(/*0*/ index: kotlin.Int): kotlin.Int
     public open override /*1*/ /*fake_override*/ fun hashCode(): kotlin.Int
     public open override /*1*/ /*fake_override*/ fun indexOf(/*0*/ element: kotlin.Int!): kotlin.Int
     public open override /*1*/ /*fake_override*/ fun isEmpty(): kotlin.Boolean
@@ -29,7 +29,7 @@ public abstract class A : B {
     public open override /*1*/ fun removeAt(/*0*/ x: kotlin.Int): kotlin.Int
     protected/*protected and package*/ open override /*1*/ /*fake_override*/ fun removeRange(/*0*/ p0: kotlin.Int, /*1*/ p1: kotlin.Int): kotlin.Unit
     public open override /*1*/ /*fake_override*/ fun retainAll(/*0*/ elements: kotlin.Collection<kotlin.Int!>): kotlin.Boolean
-    public open override /*1*/ /*fake_override*/ fun set(/*0*/ index: kotlin.Int, /*1*/ element: kotlin.Int!): kotlin.Int!
+    public open override /*1*/ /*fake_override*/ fun set(/*0*/ index: kotlin.Int, /*1*/ element: kotlin.Int): kotlin.Int
     public open override /*1*/ /*fake_override*/ fun subList(/*0*/ fromIndex: kotlin.Int, /*1*/ toIndex: kotlin.Int): kotlin.MutableList<kotlin.Int!>
     public open override /*1*/ /*fake_override*/ fun toArray(): kotlin.Array<(out) kotlin.Any!>!
     public open override /*1*/ /*fake_override*/ fun </*0*/ T : kotlin.Any!> toArray(/*0*/ p0: kotlin.Array<(out) T!>!): kotlin.Array<(out) T!>!
@@ -53,7 +53,7 @@ public abstract class B : kotlin.MutableList<kotlin.Int>, java.util.AbstractList
     public open override /*2*/ /*fake_override*/ fun contains(/*0*/ element: kotlin.Int!): kotlin.Boolean
     public open override /*2*/ /*fake_override*/ fun containsAll(/*0*/ elements: kotlin.Collection<kotlin.Int!>): kotlin.Boolean
     public open override /*2*/ /*fake_override*/ fun equals(/*0*/ other: kotlin.Any?): kotlin.Boolean
-    public abstract override /*2*/ /*fake_override*/ fun get(/*0*/ index: kotlin.Int): kotlin.Int!
+    public abstract override /*2*/ /*fake_override*/ fun get(/*0*/ index: kotlin.Int): kotlin.Int
     public open override /*2*/ /*fake_override*/ fun hashCode(): kotlin.Int
     public open override /*2*/ /*fake_override*/ fun indexOf(/*0*/ element: kotlin.Int!): kotlin.Int
     public open override /*2*/ /*fake_override*/ fun isEmpty(): kotlin.Boolean
@@ -68,7 +68,7 @@ public abstract class B : kotlin.MutableList<kotlin.Int>, java.util.AbstractList
     public open override /*2*/ fun removeAt(/*0*/ index: kotlin.Int): kotlin.Int
     protected/*protected and package*/ open override /*1*/ /*fake_override*/ fun removeRange(/*0*/ p0: kotlin.Int, /*1*/ p1: kotlin.Int): kotlin.Unit
     public open override /*2*/ /*fake_override*/ fun retainAll(/*0*/ elements: kotlin.Collection<kotlin.Int!>): kotlin.Boolean
-    public open override /*2*/ /*fake_override*/ fun set(/*0*/ index: kotlin.Int, /*1*/ element: kotlin.Int!): kotlin.Int!
+    public open override /*2*/ /*fake_override*/ fun set(/*0*/ index: kotlin.Int, /*1*/ element: kotlin.Int): kotlin.Int
     public open override /*2*/ /*fake_override*/ fun subList(/*0*/ fromIndex: kotlin.Int, /*1*/ toIndex: kotlin.Int): kotlin.MutableList<kotlin.Int!>
     public open override /*1*/ /*fake_override*/ fun toArray(): kotlin.Array<(out) kotlin.Any!>!
     public open override /*1*/ /*fake_override*/ fun </*0*/ T : kotlin.Any!> toArray(/*0*/ p0: kotlin.Array<(out) T!>!): kotlin.Array<(out) T!>!
diff --git a/compiler/testData/diagnostics/tests/override/clashesOnInheritance/flexibleReturnType.kt b/compiler/testData/diagnostics/tests/override/clashesOnInheritance/flexibleReturnType.kt
index fba4a9e01d2..1c27c283354 100644
--- a/compiler/testData/diagnostics/tests/override/clashesOnInheritance/flexibleReturnType.kt
+++ b/compiler/testData/diagnostics/tests/override/clashesOnInheritance/flexibleReturnType.kt
@@ -21,10 +21,7 @@ interface KDerived2a : K2, J
 interface KDerived2b : J, K2
 
 interface KDerived12a : K1, K2, J
-// public abstract override /*3*/ /*fake_override*/ fun foo(): kotlin.String!
 
-<!RETURN_TYPE_MISMATCH_ON_INHERITANCE!>interface KDerived12b<!> : K1, J, K2 // TODO
-// public abstract override /*3*/ /*fake_override*/ fun foo(): kotlin.String?
+interface KDerived12b : K1, J, K2
 
-interface KDerived12c : J, K1, K2
-// public abstract override /*3*/ /*fake_override*/ fun foo(): kotlin.String
\ No newline at end of file
+interface KDerived12c : J, K1, K2
\ No newline at end of file
diff --git a/compiler/testData/diagnostics/tests/override/clashesOnInheritance/flexibleReturnType.txt b/compiler/testData/diagnostics/tests/override/clashesOnInheritance/flexibleReturnType.txt
index 89d4705ab07..f960030f435 100644
--- a/compiler/testData/diagnostics/tests/override/clashesOnInheritance/flexibleReturnType.txt
+++ b/compiler/testData/diagnostics/tests/override/clashesOnInheritance/flexibleReturnType.txt
@@ -25,14 +25,14 @@ public interface K2 {
 
 public interface KDerived12a : K1, K2, J {
     public open override /*3*/ /*fake_override*/ fun equals(/*0*/ other: kotlin.Any?): kotlin.Boolean
-    public abstract override /*3*/ /*fake_override*/ fun foo(): kotlin.String!
+    public abstract override /*3*/ /*fake_override*/ fun foo(): kotlin.String
     public open override /*3*/ /*fake_override*/ fun hashCode(): kotlin.Int
     public open override /*3*/ /*fake_override*/ fun toString(): kotlin.String
 }
 
 public interface KDerived12b : K1, J, K2 {
     public open override /*3*/ /*fake_override*/ fun equals(/*0*/ other: kotlin.Any?): kotlin.Boolean
-    public abstract override /*3*/ /*fake_override*/ fun foo(): kotlin.String?
+    public abstract override /*3*/ /*fake_override*/ fun foo(): kotlin.String
     public open override /*3*/ /*fake_override*/ fun hashCode(): kotlin.Int
     public open override /*3*/ /*fake_override*/ fun toString(): kotlin.String
 }
@@ -46,7 +46,7 @@ public interface KDerived12c : J, K1, K2 {
 
 public interface KDerived1a : K1, J {
     public open override /*2*/ /*fake_override*/ fun equals(/*0*/ other: kotlin.Any?): kotlin.Boolean
-    public abstract override /*2*/ /*fake_override*/ fun foo(): kotlin.String!
+    public abstract override /*2*/ /*fake_override*/ fun foo(): kotlin.String
     public open override /*2*/ /*fake_override*/ fun hashCode(): kotlin.Int
     public open override /*2*/ /*fake_override*/ fun toString(): kotlin.String
 }
diff --git a/compiler/testData/diagnostics/tests/override/clashesOnInheritance/flexibleReturnTypeIn.kt b/compiler/testData/diagnostics/tests/override/clashesOnInheritance/flexibleReturnTypeIn.kt
new file mode 100644
index 00000000000..32e735d2c36
--- /dev/null
+++ b/compiler/testData/diagnostics/tests/override/clashesOnInheritance/flexibleReturnTypeIn.kt
@@ -0,0 +1,63 @@
+// FILE: InOut.k
+interface In<in T>
+interface Out<out T>
+interface Inv<T>
+
+// FILE: J1.java
+public interface J1 {
+    In<String> foo();
+}
+
+// FILE: J2.java
+import org.jetbrains.annotations.*;
+
+public interface J2 {
+    @NotNull In<String> foo();
+}
+
+// FILE: J3.java
+import org.jetbrains.annotations.*;
+
+public interface J3 {
+    @Nullable In<String> foo();
+}
+
+// FILE: K.kt
+interface K1 {
+    fun foo(): In<String>
+}
+
+interface K2 {
+    fun foo(): In<String?>
+}
+
+// FIXME TestJ1K1 should have foo(): In<String!>, since In<String!> <: In<String>.
+interface TestJ1K1 : J1, K1
+interface TestK1J1 : K1, J1
+
+interface TestJ1K2 : J1, K2
+interface TestK2J1 : K2, J1
+
+interface TestJ2K1 : J2, K1
+interface TestK1J2 : K1, J2
+
+interface TestJ2K2 : J2, K2
+interface TestK2J2 : K2, J2
+
+interface TestJ3K1 : J3, K1
+interface TestK1J3 : K1, J3
+
+interface TestJ3K2 : J3, K2
+interface TestK2J3 : K2, J3
+
+interface TestJ1K1K2 : J1, K1, K2
+interface TestK1J1K2 : K1, J1, K2
+interface TestK1K2J1 : K1, K2, J1
+
+interface TestJ2K1K2 : J2, K1, K2
+interface TestK1J2K2 : K1, J2, K2
+interface TestK1K2J2 : K1, K2, J2
+
+interface TestJ3K1K2 : J3, K1, K2
+interface TestK1J3K2 : K1, J3, K2
+interface TestK1K2J3 : K1, K2, J3
\ No newline at end of file
diff --git a/compiler/testData/diagnostics/tests/override/clashesOnInheritance/flexibleReturnTypeIn.txt b/compiler/testData/diagnostics/tests/override/clashesOnInheritance/flexibleReturnTypeIn.txt
new file mode 100644
index 00000000000..fa50898079b
--- /dev/null
+++ b/compiler/testData/diagnostics/tests/override/clashesOnInheritance/flexibleReturnTypeIn.txt
@@ -0,0 +1,205 @@
+package
+
+public /*synthesized*/ fun J1(/*0*/ function: () -> In<kotlin.String!>!): J1
+public /*synthesized*/ fun J2(/*0*/ function: () -> In<kotlin.String!>!): J2
+public /*synthesized*/ fun J3(/*0*/ function: () -> In<kotlin.String!>!): J3
+
+public interface In</*0*/ in T> {
+    public open override /*1*/ /*fake_override*/ fun equals(/*0*/ other: kotlin.Any?): kotlin.Boolean
+    public open override /*1*/ /*fake_override*/ fun hashCode(): kotlin.Int
+    public open override /*1*/ /*fake_override*/ fun toString(): kotlin.String
+}
+
+public interface Inv</*0*/ T> {
+    public open override /*1*/ /*fake_override*/ fun equals(/*0*/ other: kotlin.Any?): kotlin.Boolean
+    public open override /*1*/ /*fake_override*/ fun hashCode(): kotlin.Int
+    public open override /*1*/ /*fake_override*/ fun toString(): kotlin.String
+}
+
+public interface J1 {
+    public open override /*1*/ /*fake_override*/ fun equals(/*0*/ other: kotlin.Any?): kotlin.Boolean
+    public abstract fun foo(): In<kotlin.String!>!
+    public open override /*1*/ /*fake_override*/ fun hashCode(): kotlin.Int
+    public open override /*1*/ /*fake_override*/ fun toString(): kotlin.String
+}
+
+public interface J2 {
+    public open override /*1*/ /*fake_override*/ fun equals(/*0*/ other: kotlin.Any?): kotlin.Boolean
+    @org.jetbrains.annotations.NotNull() public abstract fun foo(): In<kotlin.String!>
+    public open override /*1*/ /*fake_override*/ fun hashCode(): kotlin.Int
+    public open override /*1*/ /*fake_override*/ fun toString(): kotlin.String
+}
+
+public interface J3 {
+    public open override /*1*/ /*fake_override*/ fun equals(/*0*/ other: kotlin.Any?): kotlin.Boolean
+    @org.jetbrains.annotations.Nullable() public abstract fun foo(): In<kotlin.String!>?
+    public open override /*1*/ /*fake_override*/ fun hashCode(): kotlin.Int
+    public open override /*1*/ /*fake_override*/ fun toString(): kotlin.String
+}
+
+public interface K1 {
+    public open override /*1*/ /*fake_override*/ fun equals(/*0*/ other: kotlin.Any?): kotlin.Boolean
+    public abstract fun foo(): In<kotlin.String>
+    public open override /*1*/ /*fake_override*/ fun hashCode(): kotlin.Int
+    public open override /*1*/ /*fake_override*/ fun toString(): kotlin.String
+}
+
+public interface K2 {
+    public open override /*1*/ /*fake_override*/ fun equals(/*0*/ other: kotlin.Any?): kotlin.Boolean
+    public abstract fun foo(): In<kotlin.String?>
+    public open override /*1*/ /*fake_override*/ fun hashCode(): kotlin.Int
+    public open override /*1*/ /*fake_override*/ fun toString(): kotlin.String
+}
+
+public interface Out</*0*/ out T> {
+    public open override /*1*/ /*fake_override*/ fun equals(/*0*/ other: kotlin.Any?): kotlin.Boolean
+    public open override /*1*/ /*fake_override*/ fun hashCode(): kotlin.Int
+    public open override /*1*/ /*fake_override*/ fun toString(): kotlin.String
+}
+
+public interface TestJ1K1 : J1, K1 {
+    public open override /*2*/ /*fake_override*/ fun equals(/*0*/ other: kotlin.Any?): kotlin.Boolean
+    public abstract override /*2*/ /*fake_override*/ fun foo(): In<kotlin.String>
+    public open override /*2*/ /*fake_override*/ fun hashCode(): kotlin.Int
+    public open override /*2*/ /*fake_override*/ fun toString(): kotlin.String
+}
+
+public interface TestJ1K1K2 : J1, K1, K2 {
+    public open override /*3*/ /*fake_override*/ fun equals(/*0*/ other: kotlin.Any?): kotlin.Boolean
+    public abstract override /*3*/ /*fake_override*/ fun foo(): In<kotlin.String?>
+    public open override /*3*/ /*fake_override*/ fun hashCode(): kotlin.Int
+    public open override /*3*/ /*fake_override*/ fun toString(): kotlin.String
+}
+
+public interface TestJ1K2 : J1, K2 {
+    public open override /*2*/ /*fake_override*/ fun equals(/*0*/ other: kotlin.Any?): kotlin.Boolean
+    public abstract override /*2*/ /*fake_override*/ fun foo(): In<kotlin.String?>
+    public open override /*2*/ /*fake_override*/ fun hashCode(): kotlin.Int
+    public open override /*2*/ /*fake_override*/ fun toString(): kotlin.String
+}
+
+public interface TestJ2K1 : J2, K1 {
+    public open override /*2*/ /*fake_override*/ fun equals(/*0*/ other: kotlin.Any?): kotlin.Boolean
+    public abstract override /*2*/ /*fake_override*/ fun foo(): In<kotlin.String>
+    public open override /*2*/ /*fake_override*/ fun hashCode(): kotlin.Int
+    public open override /*2*/ /*fake_override*/ fun toString(): kotlin.String
+}
+
+public interface TestJ2K1K2 : J2, K1, K2 {
+    public open override /*3*/ /*fake_override*/ fun equals(/*0*/ other: kotlin.Any?): kotlin.Boolean
+    public abstract override /*3*/ /*fake_override*/ fun foo(): In<kotlin.String?>
+    public open override /*3*/ /*fake_override*/ fun hashCode(): kotlin.Int
+    public open override /*3*/ /*fake_override*/ fun toString(): kotlin.String
+}
+
+public interface TestJ2K2 : J2, K2 {
+    public open override /*2*/ /*fake_override*/ fun equals(/*0*/ other: kotlin.Any?): kotlin.Boolean
+    public abstract override /*2*/ /*fake_override*/ fun foo(): In<kotlin.String?>
+    public open override /*2*/ /*fake_override*/ fun hashCode(): kotlin.Int
+    public open override /*2*/ /*fake_override*/ fun toString(): kotlin.String
+}
+
+public interface TestJ3K1 : J3, K1 {
+    public open override /*2*/ /*fake_override*/ fun equals(/*0*/ other: kotlin.Any?): kotlin.Boolean
+    public abstract override /*2*/ /*fake_override*/ fun foo(): In<kotlin.String>
+    public open override /*2*/ /*fake_override*/ fun hashCode(): kotlin.Int
+    public open override /*2*/ /*fake_override*/ fun toString(): kotlin.String
+}
+
+public interface TestJ3K1K2 : J3, K1, K2 {
+    public open override /*3*/ /*fake_override*/ fun equals(/*0*/ other: kotlin.Any?): kotlin.Boolean
+    public abstract override /*3*/ /*fake_override*/ fun foo(): In<kotlin.String?>
+    public open override /*3*/ /*fake_override*/ fun hashCode(): kotlin.Int
+    public open override /*3*/ /*fake_override*/ fun toString(): kotlin.String
+}
+
+public interface TestJ3K2 : J3, K2 {
+    public open override /*2*/ /*fake_override*/ fun equals(/*0*/ other: kotlin.Any?): kotlin.Boolean
+    public abstract override /*2*/ /*fake_override*/ fun foo(): In<kotlin.String?>
+    public open override /*2*/ /*fake_override*/ fun hashCode(): kotlin.Int
+    public open override /*2*/ /*fake_override*/ fun toString(): kotlin.String
+}
+
+public interface TestK1J1 : K1, J1 {
+    public open override /*2*/ /*fake_override*/ fun equals(/*0*/ other: kotlin.Any?): kotlin.Boolean
+    public abstract override /*2*/ /*fake_override*/ fun foo(): In<kotlin.String>
+    public open override /*2*/ /*fake_override*/ fun hashCode(): kotlin.Int
+    public open override /*2*/ /*fake_override*/ fun toString(): kotlin.String
+}
+
+public interface TestK1J1K2 : K1, J1, K2 {
+    public open override /*3*/ /*fake_override*/ fun equals(/*0*/ other: kotlin.Any?): kotlin.Boolean
+    public abstract override /*3*/ /*fake_override*/ fun foo(): In<kotlin.String?>
+    public open override /*3*/ /*fake_override*/ fun hashCode(): kotlin.Int
+    public open override /*3*/ /*fake_override*/ fun toString(): kotlin.String
+}
+
+public interface TestK1J2 : K1, J2 {
+    public open override /*2*/ /*fake_override*/ fun equals(/*0*/ other: kotlin.Any?): kotlin.Boolean
+    @org.jetbrains.annotations.NotNull() public abstract override /*2*/ /*fake_override*/ fun foo(): In<kotlin.String!>
+    public open override /*2*/ /*fake_override*/ fun hashCode(): kotlin.Int
+    public open override /*2*/ /*fake_override*/ fun toString(): kotlin.String
+}
+
+public interface TestK1J2K2 : K1, J2, K2 {
+    public open override /*3*/ /*fake_override*/ fun equals(/*0*/ other: kotlin.Any?): kotlin.Boolean
+    public abstract override /*3*/ /*fake_override*/ fun foo(): In<kotlin.String?>
+    public open override /*3*/ /*fake_override*/ fun hashCode(): kotlin.Int
+    public open override /*3*/ /*fake_override*/ fun toString(): kotlin.String
+}
+
+public interface TestK1J3 : K1, J3 {
+    public open override /*2*/ /*fake_override*/ fun equals(/*0*/ other: kotlin.Any?): kotlin.Boolean
+    public abstract override /*2*/ /*fake_override*/ fun foo(): In<kotlin.String>
+    public open override /*2*/ /*fake_override*/ fun hashCode(): kotlin.Int
+    public open override /*2*/ /*fake_override*/ fun toString(): kotlin.String
+}
+
+public interface TestK1J3K2 : K1, J3, K2 {
+    public open override /*3*/ /*fake_override*/ fun equals(/*0*/ other: kotlin.Any?): kotlin.Boolean
+    public abstract override /*3*/ /*fake_override*/ fun foo(): In<kotlin.String?>
+    public open override /*3*/ /*fake_override*/ fun hashCode(): kotlin.Int
+    public open override /*3*/ /*fake_override*/ fun toString(): kotlin.String
+}
+
+public interface TestK1K2J1 : K1, K2, J1 {
+    public open override /*3*/ /*fake_override*/ fun equals(/*0*/ other: kotlin.Any?): kotlin.Boolean
+    public abstract override /*3*/ /*fake_override*/ fun foo(): In<kotlin.String?>
+    public open override /*3*/ /*fake_override*/ fun hashCode(): kotlin.Int
+    public open override /*3*/ /*fake_override*/ fun toString(): kotlin.String
+}
+
+public interface TestK1K2J2 : K1, K2, J2 {
+    public open override /*3*/ /*fake_override*/ fun equals(/*0*/ other: kotlin.Any?): kotlin.Boolean
+    @org.jetbrains.annotations.NotNull() public abstract override /*3*/ /*fake_override*/ fun foo(): In<kotlin.String!>
+    public open override /*3*/ /*fake_override*/ fun hashCode(): kotlin.Int
+    public open override /*3*/ /*fake_override*/ fun toString(): kotlin.String
+}
+
+public interface TestK1K2J3 : K1, K2, J3 {
+    public open override /*3*/ /*fake_override*/ fun equals(/*0*/ other: kotlin.Any?): kotlin.Boolean
+    public abstract override /*3*/ /*fake_override*/ fun foo(): In<kotlin.String?>
+    public open override /*3*/ /*fake_override*/ fun hashCode(): kotlin.Int
+    public open override /*3*/ /*fake_override*/ fun toString(): kotlin.String
+}
+
+public interface TestK2J1 : K2, J1 {
+    public open override /*2*/ /*fake_override*/ fun equals(/*0*/ other: kotlin.Any?): kotlin.Boolean
+    public abstract override /*2*/ /*fake_override*/ fun foo(): In<kotlin.String?>
+    public open override /*2*/ /*fake_override*/ fun hashCode(): kotlin.Int
+    public open override /*2*/ /*fake_override*/ fun toString(): kotlin.String
+}
+
+public interface TestK2J2 : K2, J2 {
+    public open override /*2*/ /*fake_override*/ fun equals(/*0*/ other: kotlin.Any?): kotlin.Boolean
+    @org.jetbrains.annotations.NotNull() public abstract override /*2*/ /*fake_override*/ fun foo(): In<kotlin.String!>
+    public open override /*2*/ /*fake_override*/ fun hashCode(): kotlin.Int
+    public open override /*2*/ /*fake_override*/ fun toString(): kotlin.String
+}
+
+public interface TestK2J3 : K2, J3 {
+    public open override /*2*/ /*fake_override*/ fun equals(/*0*/ other: kotlin.Any?): kotlin.Boolean
+    public abstract override /*2*/ /*fake_override*/ fun foo(): In<kotlin.String?>
+    public open override /*2*/ /*fake_override*/ fun hashCode(): kotlin.Int
+    public open override /*2*/ /*fake_override*/ fun toString(): kotlin.String
+}
diff --git a/compiler/testData/diagnostics/tests/override/clashesOnInheritance/flexibleReturnTypeList.kt b/compiler/testData/diagnostics/tests/override/clashesOnInheritance/flexibleReturnTypeList.kt
new file mode 100644
index 00000000000..dc217781eaa
--- /dev/null
+++ b/compiler/testData/diagnostics/tests/override/clashesOnInheritance/flexibleReturnTypeList.kt
@@ -0,0 +1,37 @@
+// FILE: J.java
+public interface J {
+    java.util.List<String> foo();
+}
+
+// FILE: K.kt
+interface ILNS {
+    fun foo(): List<String?>
+}
+
+interface IMLS {
+    fun foo(): MutableList<String>
+}
+
+interface IMLNS {
+    fun foo(): MutableList<String?>
+}
+
+interface ILS {
+    fun foo(): List<String>
+}
+
+interface Test1 : ILNS, J
+interface Test2 : J, ILNS
+
+interface Test3 : IMLS, J
+interface Test4 : J, IMLS
+
+interface Test5 : ILNS, IMLS, J
+interface Test6 : ILNS, J, IMLS
+interface Test7 : J, ILNS, IMLS
+
+// ILS and IMLNS are incompatible
+
+<!RETURN_TYPE_MISMATCH_ON_INHERITANCE!>interface Test8<!> : J, IMLNS, ILS
+<!RETURN_TYPE_MISMATCH_ON_INHERITANCE!>interface Test9<!> : IMLNS, J, ILS
+<!RETURN_TYPE_MISMATCH_ON_INHERITANCE!>interface Test10<!> : IMLNS, ILS, J
\ No newline at end of file
diff --git a/compiler/testData/diagnostics/tests/override/clashesOnInheritance/flexibleReturnTypeList.txt b/compiler/testData/diagnostics/tests/override/clashesOnInheritance/flexibleReturnTypeList.txt
new file mode 100644
index 00000000000..e035ef8128f
--- /dev/null
+++ b/compiler/testData/diagnostics/tests/override/clashesOnInheritance/flexibleReturnTypeList.txt
@@ -0,0 +1,108 @@
+package
+
+public /*synthesized*/ fun J(/*0*/ function: () -> kotlin.(Mutable)List<kotlin.String!>!): J
+
+public interface ILNS {
+    public open override /*1*/ /*fake_override*/ fun equals(/*0*/ other: kotlin.Any?): kotlin.Boolean
+    public abstract fun foo(): kotlin.List<kotlin.String?>
+    public open override /*1*/ /*fake_override*/ fun hashCode(): kotlin.Int
+    public open override /*1*/ /*fake_override*/ fun toString(): kotlin.String
+}
+
+public interface ILS {
+    public open override /*1*/ /*fake_override*/ fun equals(/*0*/ other: kotlin.Any?): kotlin.Boolean
+    public abstract fun foo(): kotlin.List<kotlin.String>
+    public open override /*1*/ /*fake_override*/ fun hashCode(): kotlin.Int
+    public open override /*1*/ /*fake_override*/ fun toString(): kotlin.String
+}
+
+public interface IMLNS {
+    public open override /*1*/ /*fake_override*/ fun equals(/*0*/ other: kotlin.Any?): kotlin.Boolean
+    public abstract fun foo(): kotlin.MutableList<kotlin.String?>
+    public open override /*1*/ /*fake_override*/ fun hashCode(): kotlin.Int
+    public open override /*1*/ /*fake_override*/ fun toString(): kotlin.String
+}
+
+public interface IMLS {
+    public open override /*1*/ /*fake_override*/ fun equals(/*0*/ other: kotlin.Any?): kotlin.Boolean
+    public abstract fun foo(): kotlin.MutableList<kotlin.String>
+    public open override /*1*/ /*fake_override*/ fun hashCode(): kotlin.Int
+    public open override /*1*/ /*fake_override*/ fun toString(): kotlin.String
+}
+
+public interface J {
+    public open override /*1*/ /*fake_override*/ fun equals(/*0*/ other: kotlin.Any?): kotlin.Boolean
+    public abstract fun foo(): kotlin.(Mutable)List<kotlin.String!>!
+    public open override /*1*/ /*fake_override*/ fun hashCode(): kotlin.Int
+    public open override /*1*/ /*fake_override*/ fun toString(): kotlin.String
+}
+
+public interface Test1 : ILNS, J {
+    public open override /*2*/ /*fake_override*/ fun equals(/*0*/ other: kotlin.Any?): kotlin.Boolean
+    public abstract override /*2*/ /*fake_override*/ fun foo(): kotlin.List<kotlin.String?>
+    public open override /*2*/ /*fake_override*/ fun hashCode(): kotlin.Int
+    public open override /*2*/ /*fake_override*/ fun toString(): kotlin.String
+}
+
+public interface Test10 : IMLNS, ILS, J {
+    public open override /*3*/ /*fake_override*/ fun equals(/*0*/ other: kotlin.Any?): kotlin.Boolean
+    public abstract override /*3*/ /*fake_override*/ fun foo(): kotlin.MutableList<kotlin.String?>
+    public open override /*3*/ /*fake_override*/ fun hashCode(): kotlin.Int
+    public open override /*3*/ /*fake_override*/ fun toString(): kotlin.String
+}
+
+public interface Test2 : J, ILNS {
+    public open override /*2*/ /*fake_override*/ fun equals(/*0*/ other: kotlin.Any?): kotlin.Boolean
+    public abstract override /*2*/ /*fake_override*/ fun foo(): kotlin.List<kotlin.String?>
+    public open override /*2*/ /*fake_override*/ fun hashCode(): kotlin.Int
+    public open override /*2*/ /*fake_override*/ fun toString(): kotlin.String
+}
+
+public interface Test3 : IMLS, J {
+    public open override /*2*/ /*fake_override*/ fun equals(/*0*/ other: kotlin.Any?): kotlin.Boolean
+    public abstract override /*2*/ /*fake_override*/ fun foo(): kotlin.MutableList<kotlin.String>
+    public open override /*2*/ /*fake_override*/ fun hashCode(): kotlin.Int
+    public open override /*2*/ /*fake_override*/ fun toString(): kotlin.String
+}
+
+public interface Test4 : J, IMLS {
+    public open override /*2*/ /*fake_override*/ fun equals(/*0*/ other: kotlin.Any?): kotlin.Boolean
+    public abstract override /*2*/ /*fake_override*/ fun foo(): kotlin.MutableList<kotlin.String>
+    public open override /*2*/ /*fake_override*/ fun hashCode(): kotlin.Int
+    public open override /*2*/ /*fake_override*/ fun toString(): kotlin.String
+}
+
+public interface Test5 : ILNS, IMLS, J {
+    public open override /*3*/ /*fake_override*/ fun equals(/*0*/ other: kotlin.Any?): kotlin.Boolean
+    public abstract override /*3*/ /*fake_override*/ fun foo(): kotlin.MutableList<kotlin.String>
+    public open override /*3*/ /*fake_override*/ fun hashCode(): kotlin.Int
+    public open override /*3*/ /*fake_override*/ fun toString(): kotlin.String
+}
+
+public interface Test6 : ILNS, J, IMLS {
+    public open override /*3*/ /*fake_override*/ fun equals(/*0*/ other: kotlin.Any?): kotlin.Boolean
+    public abstract override /*3*/ /*fake_override*/ fun foo(): kotlin.MutableList<kotlin.String>
+    public open override /*3*/ /*fake_override*/ fun hashCode(): kotlin.Int
+    public open override /*3*/ /*fake_override*/ fun toString(): kotlin.String
+}
+
+public interface Test7 : J, ILNS, IMLS {
+    public open override /*3*/ /*fake_override*/ fun equals(/*0*/ other: kotlin.Any?): kotlin.Boolean
+    public abstract override /*3*/ /*fake_override*/ fun foo(): kotlin.MutableList<kotlin.String>
+    public open override /*3*/ /*fake_override*/ fun hashCode(): kotlin.Int
+    public open override /*3*/ /*fake_override*/ fun toString(): kotlin.String
+}
+
+public interface Test8 : J, IMLNS, ILS {
+    public open override /*3*/ /*fake_override*/ fun equals(/*0*/ other: kotlin.Any?): kotlin.Boolean
+    public abstract override /*3*/ /*fake_override*/ fun foo(): kotlin.MutableList<kotlin.String?>
+    public open override /*3*/ /*fake_override*/ fun hashCode(): kotlin.Int
+    public open override /*3*/ /*fake_override*/ fun toString(): kotlin.String
+}
+
+public interface Test9 : IMLNS, J, ILS {
+    public open override /*3*/ /*fake_override*/ fun equals(/*0*/ other: kotlin.Any?): kotlin.Boolean
+    public abstract override /*3*/ /*fake_override*/ fun foo(): kotlin.MutableList<kotlin.String?>
+    public open override /*3*/ /*fake_override*/ fun hashCode(): kotlin.Int
+    public open override /*3*/ /*fake_override*/ fun toString(): kotlin.String
+}
diff --git a/compiler/testData/diagnostics/tests/override/clashesOnInheritance/propertyTypeMismatch.kt b/compiler/testData/diagnostics/tests/override/clashesOnInheritance/valTypeMismatch.kt
similarity index 100%
rename from compiler/testData/diagnostics/tests/override/clashesOnInheritance/propertyTypeMismatch.kt
rename to compiler/testData/diagnostics/tests/override/clashesOnInheritance/valTypeMismatch.kt
diff --git a/compiler/testData/diagnostics/tests/override/clashesOnInheritance/propertyTypeMismatch.txt b/compiler/testData/diagnostics/tests/override/clashesOnInheritance/valTypeMismatch.txt
similarity index 100%
rename from compiler/testData/diagnostics/tests/override/clashesOnInheritance/propertyTypeMismatch.txt
rename to compiler/testData/diagnostics/tests/override/clashesOnInheritance/valTypeMismatch.txt
diff --git a/compiler/testData/diagnostics/tests/override/clashesOnInheritance/varTypeMismatch.kt b/compiler/testData/diagnostics/tests/override/clashesOnInheritance/varTypeMismatch.kt
new file mode 100644
index 00000000000..68ac74ecb34
--- /dev/null
+++ b/compiler/testData/diagnostics/tests/override/clashesOnInheritance/varTypeMismatch.kt
@@ -0,0 +1,29 @@
+open class A {
+    open var foo: Boolean = true
+}
+
+interface IA {
+    var foo: String
+}
+
+interface IAA {
+    var foo: Int
+}
+
+interface IGA<T> {
+    var foo: T
+}
+
+<!PROPERTY_TYPE_MISMATCH_ON_INHERITANCE!>class B1<!>: A(), IA
+
+<!PROPERTY_TYPE_MISMATCH_ON_INHERITANCE!>class B2<!>: A(), IA, IAA
+
+abstract <!PROPERTY_TYPE_MISMATCH_ON_INHERITANCE!>class B3<!>: IA, IAA
+
+class BS1: A(), IGA<Boolean>
+
+<!PROPERTY_TYPE_MISMATCH_ON_INHERITANCE!>class BS2<!>: A(), IGA<Any>
+
+<!PROPERTY_TYPE_MISMATCH_ON_INHERITANCE!>class BS3<!>: A(), IGA<String>
+
+<!PROPERTY_TYPE_MISMATCH_ON_INHERITANCE!>class BG1<!><T>: A(), IGA<T>
diff --git a/compiler/testData/diagnostics/tests/override/clashesOnInheritance/varTypeMismatch.txt b/compiler/testData/diagnostics/tests/override/clashesOnInheritance/varTypeMismatch.txt
new file mode 100644
index 00000000000..a8ca3c0a73a
--- /dev/null
+++ b/compiler/testData/diagnostics/tests/override/clashesOnInheritance/varTypeMismatch.txt
@@ -0,0 +1,86 @@
+package
+
+public open class A {
+    public constructor A()
+    public open var foo: kotlin.Boolean
+    public open override /*1*/ /*fake_override*/ fun equals(/*0*/ other: kotlin.Any?): kotlin.Boolean
+    public open override /*1*/ /*fake_override*/ fun hashCode(): kotlin.Int
+    public open override /*1*/ /*fake_override*/ fun toString(): kotlin.String
+}
+
+public final class B1 : A, IA {
+    public constructor B1()
+    public open override /*2*/ /*fake_override*/ var foo: kotlin.Boolean
+    public open override /*2*/ /*fake_override*/ fun equals(/*0*/ other: kotlin.Any?): kotlin.Boolean
+    public open override /*2*/ /*fake_override*/ fun hashCode(): kotlin.Int
+    public open override /*2*/ /*fake_override*/ fun toString(): kotlin.String
+}
+
+public final class B2 : A, IA, IAA {
+    public constructor B2()
+    public open override /*3*/ /*fake_override*/ var foo: kotlin.Boolean
+    public open override /*3*/ /*fake_override*/ fun equals(/*0*/ other: kotlin.Any?): kotlin.Boolean
+    public open override /*3*/ /*fake_override*/ fun hashCode(): kotlin.Int
+    public open override /*3*/ /*fake_override*/ fun toString(): kotlin.String
+}
+
+public abstract class B3 : IA, IAA {
+    public constructor B3()
+    public abstract override /*2*/ /*fake_override*/ var foo: kotlin.String
+    public open override /*2*/ /*fake_override*/ fun equals(/*0*/ other: kotlin.Any?): kotlin.Boolean
+    public open override /*2*/ /*fake_override*/ fun hashCode(): kotlin.Int
+    public open override /*2*/ /*fake_override*/ fun toString(): kotlin.String
+}
+
+public final class BG1</*0*/ T> : A, IGA<T> {
+    public constructor BG1</*0*/ T>()
+    public open override /*2*/ /*fake_override*/ var foo: kotlin.Boolean
+    public open override /*2*/ /*fake_override*/ fun equals(/*0*/ other: kotlin.Any?): kotlin.Boolean
+    public open override /*2*/ /*fake_override*/ fun hashCode(): kotlin.Int
+    public open override /*2*/ /*fake_override*/ fun toString(): kotlin.String
+}
+
+public final class BS1 : A, IGA<kotlin.Boolean> {
+    public constructor BS1()
+    public open override /*2*/ /*fake_override*/ var foo: kotlin.Boolean
+    public open override /*2*/ /*fake_override*/ fun equals(/*0*/ other: kotlin.Any?): kotlin.Boolean
+    public open override /*2*/ /*fake_override*/ fun hashCode(): kotlin.Int
+    public open override /*2*/ /*fake_override*/ fun toString(): kotlin.String
+}
+
+public final class BS2 : A, IGA<kotlin.Any> {
+    public constructor BS2()
+    public open override /*2*/ /*fake_override*/ var foo: kotlin.Boolean
+    public open override /*2*/ /*fake_override*/ fun equals(/*0*/ other: kotlin.Any?): kotlin.Boolean
+    public open override /*2*/ /*fake_override*/ fun hashCode(): kotlin.Int
+    public open override /*2*/ /*fake_override*/ fun toString(): kotlin.String
+}
+
+public final class BS3 : A, IGA<kotlin.String> {
+    public constructor BS3()
+    public open override /*2*/ /*fake_override*/ var foo: kotlin.Boolean
+    public open override /*2*/ /*fake_override*/ fun equals(/*0*/ other: kotlin.Any?): kotlin.Boolean
+    public open override /*2*/ /*fake_override*/ fun hashCode(): kotlin.Int
+    public open override /*2*/ /*fake_override*/ fun toString(): kotlin.String
+}
+
+public interface IA {
+    public abstract var foo: kotlin.String
+    public open override /*1*/ /*fake_override*/ fun equals(/*0*/ other: kotlin.Any?): kotlin.Boolean
+    public open override /*1*/ /*fake_override*/ fun hashCode(): kotlin.Int
+    public open override /*1*/ /*fake_override*/ fun toString(): kotlin.String
+}
+
+public interface IAA {
+    public abstract var foo: kotlin.Int
+    public open override /*1*/ /*fake_override*/ fun equals(/*0*/ other: kotlin.Any?): kotlin.Boolean
+    public open override /*1*/ /*fake_override*/ fun hashCode(): kotlin.Int
+    public open override /*1*/ /*fake_override*/ fun toString(): kotlin.String
+}
+
+public interface IGA</*0*/ T> {
+    public abstract var foo: T
+    public open override /*1*/ /*fake_override*/ fun equals(/*0*/ other: kotlin.Any?): kotlin.Boolean
+    public open override /*1*/ /*fake_override*/ fun hashCode(): kotlin.Int
+    public open override /*1*/ /*fake_override*/ fun toString(): kotlin.String
+}
diff --git a/compiler/testData/diagnostics/tests/syntheticExtensions/javaProperties/KotlinOverridesJava.kt b/compiler/testData/diagnostics/tests/syntheticExtensions/javaProperties/KotlinOverridesJava.kt
index bbebad6f852..c57cb72afa5 100644
--- a/compiler/testData/diagnostics/tests/syntheticExtensions/javaProperties/KotlinOverridesJava.kt
+++ b/compiler/testData/diagnostics/tests/syntheticExtensions/javaProperties/KotlinOverridesJava.kt
@@ -24,7 +24,7 @@ fun foo(k: KotlinClass) {
     k.setSomething4("")
     k.something4 += ""
     k.setSomething4(<!NULL_FOR_NONNULL_TYPE!>null<!>)
-    k.something4 = null
+    k.something4 = <!NULL_FOR_NONNULL_TYPE!>null<!>
 
     useString(k.getSomething5())
     useString(k.something5)
diff --git a/compiler/testData/diagnostics/tests/syntheticExtensions/javaProperties/KotlinOverridesJava.txt b/compiler/testData/diagnostics/tests/syntheticExtensions/javaProperties/KotlinOverridesJava.txt
index 8b1fe9a42e2..2c2ea5d4265 100644
--- a/compiler/testData/diagnostics/tests/syntheticExtensions/javaProperties/KotlinOverridesJava.txt
+++ b/compiler/testData/diagnostics/tests/syntheticExtensions/javaProperties/KotlinOverridesJava.txt
@@ -30,7 +30,7 @@ public abstract class KotlinClass : JavaClass, KotlinInterface, JavaInterface {
     public open override /*2*/ fun getSomething1(): kotlin.Int
     public open override /*1*/ /*fake_override*/ fun getSomething2(): kotlin.Int
     public open override /*1*/ fun getSomething3(): kotlin.String
-    public abstract override /*2*/ /*fake_override*/ fun getSomething4(): kotlin.String!
+    public abstract override /*2*/ /*fake_override*/ fun getSomething4(): kotlin.String
     public open override /*1*/ fun getSomething5(): kotlin.String
     public open override /*3*/ /*fake_override*/ fun hashCode(): kotlin.Int
     public open override /*1*/ fun setSomething4(/*0*/ value: kotlin.String): kotlin.Unit
diff --git a/compiler/testData/diagnostics/testsWithJsStdLib/dynamicTypes/overrides.txt b/compiler/testData/diagnostics/testsWithJsStdLib/dynamicTypes/overrides.txt
index acd85cafb7d..51401cf6ad7 100644
--- a/compiler/testData/diagnostics/testsWithJsStdLib/dynamicTypes/overrides.txt
+++ b/compiler/testData/diagnostics/testsWithJsStdLib/dynamicTypes/overrides.txt
@@ -26,7 +26,7 @@ public interface B : A {
 public interface C : A, A1 {
     public abstract override /*1*/ /*fake_override*/ fun dynamic(/*0*/ p: dynamic): dynamic
     public open override /*2*/ /*fake_override*/ fun equals(/*0*/ other: kotlin.Any?): kotlin.Boolean
-    public abstract override /*2*/ /*fake_override*/ fun foo(/*0*/ p: dynamic): dynamic
+    public abstract override /*2*/ /*fake_override*/ fun foo(/*0*/ p: P): R
     public open override /*2*/ /*fake_override*/ fun hashCode(): kotlin.Int
     public open override /*2*/ /*fake_override*/ fun toString(): kotlin.String
 }
diff --git a/compiler/tests/org/jetbrains/kotlin/checkers/DiagnosticsTestGenerated.java b/compiler/tests/org/jetbrains/kotlin/checkers/DiagnosticsTestGenerated.java
index 57ecf2029de..812e028b794 100644
--- a/compiler/tests/org/jetbrains/kotlin/checkers/DiagnosticsTestGenerated.java
+++ b/compiler/tests/org/jetbrains/kotlin/checkers/DiagnosticsTestGenerated.java
@@ -4754,6 +4754,21 @@ public class DiagnosticsTestGenerated extends AbstractDiagnosticsTest {
                 String fileName = KotlinTestUtils.navigationMetadata("compiler/testData/diagnostics/tests/delegation/Delegation_ScopeInitializationOrder.kt");
                 doTest(fileName);
             }
+
+            @TestMetadata("compiler/testData/diagnostics/tests/delegation/clashes")
+            @TestDataPath("$PROJECT_ROOT")
+            @RunWith(JUnit3RunnerWithInners.class)
+            public static class Clashes extends AbstractDiagnosticsTest {
+                public void testAllFilesPresentInClashes() throws Exception {
+                    KotlinTestUtils.assertAllTestsPresentByMetadata(this.getClass(), new File("compiler/testData/diagnostics/tests/delegation/clashes"), Pattern.compile("^(.+)\\.kt$"), true);
+                }
+
+                @TestMetadata("returnTypeMismatch.kt")
+                public void testReturnTypeMismatch() throws Exception {
+                    String fileName = KotlinTestUtils.navigationMetadata("compiler/testData/diagnostics/tests/delegation/clashes/returnTypeMismatch.kt");
+                    doTest(fileName);
+                }
+            }
         }
 
         @TestMetadata("compiler/testData/diagnostics/tests/deparenthesize")
@@ -11315,9 +11330,15 @@ public class DiagnosticsTestGenerated extends AbstractDiagnosticsTest {
                     doTest(fileName);
                 }
 
-                @TestMetadata("propertyTypeMismatch.kt")
-                public void testPropertyTypeMismatch() throws Exception {
-                    String fileName = KotlinTestUtils.navigationMetadata("compiler/testData/diagnostics/tests/override/clashesOnInheritance/propertyTypeMismatch.kt");
+                @TestMetadata("flexibleReturnTypeIn.kt")
+                public void testFlexibleReturnTypeIn() throws Exception {
+                    String fileName = KotlinTestUtils.navigationMetadata("compiler/testData/diagnostics/tests/override/clashesOnInheritance/flexibleReturnTypeIn.kt");
+                    doTest(fileName);
+                }
+
+                @TestMetadata("flexibleReturnTypeList.kt")
+                public void testFlexibleReturnTypeList() throws Exception {
+                    String fileName = KotlinTestUtils.navigationMetadata("compiler/testData/diagnostics/tests/override/clashesOnInheritance/flexibleReturnTypeList.kt");
                     doTest(fileName);
                 }
 
@@ -11332,6 +11353,18 @@ public class DiagnosticsTestGenerated extends AbstractDiagnosticsTest {
                     String fileName = KotlinTestUtils.navigationMetadata("compiler/testData/diagnostics/tests/override/clashesOnInheritance/unrelatedInherited.kt");
                     doTest(fileName);
                 }
+
+                @TestMetadata("valTypeMismatch.kt")
+                public void testValTypeMismatch() throws Exception {
+                    String fileName = KotlinTestUtils.navigationMetadata("compiler/testData/diagnostics/tests/override/clashesOnInheritance/valTypeMismatch.kt");
+                    doTest(fileName);
+                }
+
+                @TestMetadata("varTypeMismatch.kt")
+                public void testVarTypeMismatch() throws Exception {
+                    String fileName = KotlinTestUtils.navigationMetadata("compiler/testData/diagnostics/tests/override/clashesOnInheritance/varTypeMismatch.kt");
+                    doTest(fileName);
+                }
             }
 
             @TestMetadata("compiler/testData/diagnostics/tests/override/parameterNames")
diff --git a/core/descriptors/src/org/jetbrains/kotlin/resolve/OverridingUtil.java b/core/descriptors/src/org/jetbrains/kotlin/resolve/OverridingUtil.java
index cbbd90d7b14..e613712bb99 100644
--- a/core/descriptors/src/org/jetbrains/kotlin/resolve/OverridingUtil.java
+++ b/core/descriptors/src/org/jetbrains/kotlin/resolve/OverridingUtil.java
@@ -28,6 +28,7 @@ import org.jetbrains.kotlin.descriptors.impl.PropertyDescriptorImpl;
 import org.jetbrains.kotlin.name.Name;
 import org.jetbrains.kotlin.resolve.scopes.receivers.ReceiverValue;
 import org.jetbrains.kotlin.types.KotlinType;
+import org.jetbrains.kotlin.types.TypeCapabilitiesKt;
 import org.jetbrains.kotlin.types.TypeConstructor;
 import org.jetbrains.kotlin.types.checker.KotlinTypeChecker;
 
@@ -320,14 +321,16 @@ public class OverridingUtil {
     }
 
     public static boolean isMoreSpecific(@NotNull CallableMemberDescriptor a, @NotNull CallableMemberDescriptor b) {
+        KotlinType aReturnType = a.getReturnType();
+        assert aReturnType != null : "Return type is null for " + a;
+        // Use upper bound for flexible type.
+        aReturnType = TypeCapabilitiesKt.getSupertypeRepresentative(aReturnType);
+        KotlinType bReturnType = b.getReturnType();
+        assert bReturnType != null : "Return type is null for " + b;
+
         if (a instanceof SimpleFunctionDescriptor) {
             assert b instanceof SimpleFunctionDescriptor : "b is " + b.getClass();
 
-            KotlinType aReturnType = a.getReturnType();
-            assert aReturnType != null;
-            KotlinType bReturnType = b.getReturnType();
-            assert bReturnType != null;
-
             return KotlinTypeChecker.DEFAULT.isSubtypeOf(aReturnType, bReturnType);
         }
         if (a instanceof PropertyDescriptor) {
@@ -336,11 +339,16 @@ public class OverridingUtil {
             PropertyDescriptor pa = (PropertyDescriptor) a;
             PropertyDescriptor pb = (PropertyDescriptor) b;
             if (pa.isVar() && pb.isVar()) {
-                return KotlinTypeChecker.DEFAULT.equalTypes(pa.getType(), pb.getType());
+                return KotlinTypeChecker.DEFAULT.equalTypes(aReturnType, bReturnType);
+            }
+            else if (!pa.isVar() && pb.isVar()) {
+                // val can't be more specific than var, regardless of return type.
+                return false;
+            }
+            else {
+                // both vals or var <? val
+                return KotlinTypeChecker.DEFAULT.isSubtypeOf(aReturnType, bReturnType);
             }
-
-            // both vals or var <? val
-            return KotlinTypeChecker.DEFAULT.isSubtypeOf(pa.getType(), pb.getType());
         }
         throw new IllegalArgumentException("Unexpected callable: " + a.getClass());
     }
@@ -364,6 +372,13 @@ public class OverridingUtil {
         boolean allInvisible = visibleOverridables.isEmpty();
         Collection<CallableMemberDescriptor> effectiveOverridden = allInvisible ? overridables : visibleOverridables;
 
+        // FIXME doesn't work as expected for flexible types: should create a refined signature.
+        // Current algorithm produces bad results in presence of annotated Java signatures such as:
+        //      J: foo(s: String!): String -- @NotNull String foo(String s);
+        //      K: foo(s: String): String?
+        //  --> 'foo(s: String!): String' as an inherited signature with most specific return type.
+        // This is bad because it can be overridden by 'foo(s: String?): String', which is not override-equivalent with K::foo above.
+        // Should be 'foo(s: String): String'.
         Modality modality = getMinimalModality(effectiveOverridden);
         Visibility visibility = allInvisible ? Visibilities.INVISIBLE_FAKE : Visibilities.INHERITED;
         CallableMemberDescriptor mostSpecific = selectMostSpecificMemberFromSuper(effectiveOverridden);