diff --git a/python/src/com/jetbrains/python/psi/impl/PyParameterListImpl.java b/python/src/com/jetbrains/python/psi/impl/PyParameterListImpl.java
index b9f6c75c1a2c..320adcef0953 100644
--- a/python/src/com/jetbrains/python/psi/impl/PyParameterListImpl.java
+++ b/python/src/com/jetbrains/python/psi/impl/PyParameterListImpl.java
@@ -5,9 +5,10 @@ import com.intellij.psi.PsiElement;
 import com.jetbrains.python.PyElementTypes;
 import com.jetbrains.python.psi.*;
 import com.jetbrains.python.psi.stubs.PyParameterListStub;
-import com.jetbrains.python.toolbox.ArrayIterable;
 import org.jetbrains.annotations.NotNull;
 
+import java.util.ArrayList;
+
 /**
  * @author yole
  */
@@ -140,7 +141,7 @@ public class PyParameterListImpl extends PyBaseElementImpl<PyParameterListStub>
 
   @NotNull
   public Iterable<PyElement> iterateNames() {
-    return new ArrayIterable<PyElement>(getParameters());
+    return new ArrayList<PyElement>(ParamHelper.collectNamedParameters(this));
   }
 
   public PyElement getElementNamed(final String the_name) {
diff --git a/python/testData/resolve/LambdaWithParens.py b/python/testData/resolve/LambdaWithParens.py
new file mode 100644
index 000000000000..7b7fd16adfc2
--- /dev/null
+++ b/python/testData/resolve/LambdaWithParens.py
@@ -0,0 +1 @@
+myidentityfunction = lambda(foo): f<ref>oo
diff --git a/python/testSrc/com/jetbrains/python/PyResolveTest.java b/python/testSrc/com/jetbrains/python/PyResolveTest.java
index 60c004a3459b..7c70b0c98ca6 100644
--- a/python/testSrc/com/jetbrains/python/PyResolveTest.java
+++ b/python/testSrc/com/jetbrains/python/PyResolveTest.java
@@ -240,6 +240,11 @@ public class PyResolveTest extends PyResolveTestCase {
     PsiElement targetElement = resolve();
     assertTrue(targetElement instanceof PyTargetExpression);
   }
+
+  public void testLambdaWithParens() {  // PY-882
+    PsiElement targetElement = resolve();
+    assertTrue(targetElement instanceof PyParameter);
+  }
   
   public void testTextBasedResolve() {
     ResolveResult[] resolveResults = multiResolve();