diff --git a/plugins/hg4idea/src/org/zmlx/hg4idea/provider/HgMergeProvider.java b/plugins/hg4idea/src/org/zmlx/hg4idea/provider/HgMergeProvider.java
index 8df9cfb381eb..8a93dca6f04e 100644
--- a/plugins/hg4idea/src/org/zmlx/hg4idea/provider/HgMergeProvider.java
+++ b/plugins/hg4idea/src/org/zmlx/hg4idea/provider/HgMergeProvider.java
@@ -62,18 +62,16 @@ public class HgMergeProvider implements MergeProvider {
         if (wasFileCheckedIn(repo, file)) {
           // 1. We checked in.
           // We have a merge in progress, which means we have 2 heads (parents).
-          // the revision with greater revision number is "their" revision pulled from the parent repo,
-          // the revision with lesser revision number is the local change. see http://hgbook.red-bean.com/read/a-tour-of-mercurial-merging-work.html
-          // to retrieve the base version we get the parent of the local change, i.e. the [only] parent of appropriate parent - grandparent.
+          // the second one is "their" revision pulled from the parent repo,
+          // first parent is the local change.
+          // to retrieve the base version we get the parent of the local change, i.e. the [only] parent of the first parent.
+          //Whick one is local revision depends on which one is merged with,
+          // i.e if you update to 17 revision and then merge it woth 23, so 17 is your local and 17->parent is your base revision.
+          // This may produce misunderstanding when you update your project with merging (your update firstly to next revisions  and then
+          // merge with previous). see http://hgbook.red-bean.com/read/managing-releases-and-branchy-development.html
           final Pair<HgRevisionNumber, HgRevisionNumber> parents = command.parents(repo, file);
-          if (parents.first.getRevision().compareTo(parents.second.getRevision()) > 0) {
-            serverRevisionNumber = parents.first;
-            localRevisionNumber = parents.second;
-          }
-          else {
-            serverRevisionNumber = parents.second;
-            localRevisionNumber = parents.first;
-          }
+          serverRevisionNumber = parents.second;
+          localRevisionNumber = parents.first;
           final HgContentRevision local = new HgContentRevision(myProject, hgFile, localRevisionNumber);
           mergeData.CURRENT = local.getContentAsBytes();
           // we are sure that we have a grandparent, because otherwise we'll get "repository is unrelated" error while pulling,
diff --git a/plugins/hg4idea/src/org/zmlx/hg4idea/provider/update/HgRegularUpdater.java b/plugins/hg4idea/src/org/zmlx/hg4idea/provider/update/HgRegularUpdater.java
index cf0915a5f200..91f06c5f135b 100644
--- a/plugins/hg4idea/src/org/zmlx/hg4idea/provider/update/HgRegularUpdater.java
+++ b/plugins/hg4idea/src/org/zmlx/hg4idea/provider/update/HgRegularUpdater.java
@@ -113,10 +113,7 @@ public class HgRegularUpdater implements HgUpdater {
         abortOnMultiplePulledHeads(pulledBranchHeads);
         abortOnMultipleLocalHeads(remainingOriginalBranchHeads);
 
-        //update to the pulled in head, because we consider that head as the 'authoritative' head
-        updateToPulledHead(repository, updatedFiles, pulledBranchHeads.get(0), indicator);
-
-        HgCommandResult mergeResult = doMerge(updatedFiles, indicator, warnings, remainingOriginalBranchHeads.get(0));
+        HgCommandResult mergeResult = doMerge(updatedFiles, indicator, warnings, pulledBranchHeads.get(0));
 
         if (shouldCommitAfterMerge()) {
           commitOrWarnAboutConflicts(warnings, mergeResult);