diff --git a/fluent-bundle/src/resolver/inline_expression.rs b/fluent-bundle/src/resolver/inline_expression.rs
index 3f8c8d4f..c793fe82 100644
--- a/fluent-bundle/src/resolver/inline_expression.rs
+++ b/fluent-bundle/src/resolver/inline_expression.rs
@@ -3,6 +3,7 @@ use super::{ResolveValue, ResolverError, WriteValue};
 
 use std::borrow::Borrow;
 use std::fmt;
+use std::ops::Deref;
 
 use fluent_syntax::ast;
 use fluent_syntax::unicode::{unescape_unicode, unescape_unicode_to_string};
@@ -157,8 +158,12 @@ impl<'bundle> ResolveValue<'bundle> for ast::InlineExpression<&'bundle str> {
         M: MemoizerKind,
     {
         match self {
-            Self::StringLiteral { value } => unescape_unicode_to_string(value).into(),
-            Self::NumberLiteral { value } => FluentValue::try_number(value),
+            Self::StringLiteral { value } => {
+                return unescape_unicode_to_string(value).into();
+            }
+            Self::NumberLiteral { value } => {
+                return FluentValue::try_number(value);
+            }
             Self::VariableReference { id } => {
                 if let Some(local_args) = &scope.local_args {
                     if let Some(arg) = local_args.get(id.name) {
@@ -171,7 +176,7 @@ impl<'bundle> ResolveValue<'bundle> for ast::InlineExpression<&'bundle str> {
                 if scope.local_args.is_none() {
                     scope.add_error(self.into());
                 }
-                FluentValue::Error
+                return FluentValue::Error;
             }
             Self::FunctionReference { id, arguments } => {
                 let (resolved_positional_args, resolved_named_args) =
@@ -181,16 +186,22 @@ impl<'bundle> ResolveValue<'bundle> for ast::InlineExpression<&'bundle str> {
 
                 if let Some(func) = func {
                     let result = func(resolved_positional_args.as_slice(), &resolved_named_args);
-                    result
+                    return result;
                 } else {
-                    FluentValue::Error
+                    return FluentValue::Error;
                 }
             }
-            _ => {
-                let mut result = String::new();
-                self.write(&mut result, scope).expect("Failed to write");
-                result.into()
+            Self::Placeable { expression } => {
+                if let ast::Expression::Inline(expression) = expression.deref() {
+                    return expression.resolve(scope);
+                }
             }
-        }
+            _ => {}
+        };
+
+        // Fallback to text serialization
+        let mut result = String::new();
+        self.write(&mut result, scope).expect("Failed to write");
+        result.into()
     }
 }
diff --git a/fluent-bundle/tests/terms-references-with-arguments.rs b/fluent-bundle/tests/terms-references-with-arguments.rs
new file mode 100644
index 00000000..185abee0
--- /dev/null
+++ b/fluent-bundle/tests/terms-references-with-arguments.rs
@@ -0,0 +1,74 @@
+use fluent_bundle::types::FluentNumber;
+use fluent_bundle::{FluentArgs, FluentBundle, FluentResource, FluentValue};
+
+#[test]
+fn test_function_resolve() {
+    // 1. Create bundle
+    let ftl_string = String::from(
+        "
+-liked-count = { $count ->
+        [0]     No likes yet.
+        [one]   One person liked your message
+       *[other] { $count } people liked your message
+}
+
+annotation = Beautiful! { -liked-count(count: $num) }
+    ",
+    );
+
+    let res = FluentResource::try_new(ftl_string).expect("Could not parse an FTL string.");
+    let mut bundle = FluentBundle::default();
+
+    bundle
+        .add_function("NUMBER", |positional, named| match positional.first() {
+            Some(FluentValue::Number(n)) => {
+                let mut num = n.clone();
+                num.options.merge(named);
+
+                FluentValue::Number(num)
+            }
+            _ => FluentValue::Error,
+        })
+        .expect("Failed to add a function.");
+
+    bundle
+        .add_resource(res)
+        .expect("Failed to add FTL resources to the bundle.");
+
+    // 1. Example with passing custom argument to term
+    let mut args = FluentArgs::new();
+    args.set("num", FluentValue::from(1));
+
+    let msg = bundle
+        .get_message("annotation")
+        .expect("Message doesn't exist.");
+    let mut errors = vec![];
+    let pattern = msg.value().expect("Message has no value.");
+    let value = bundle.format_pattern(pattern, Some(&args), &mut errors);
+    assert_eq!("Beautiful! One person liked your message", &value);
+
+    let mut args = FluentArgs::new();
+    args.set("num", FluentValue::from(5));
+
+    let msg = bundle
+        .get_message("annotation")
+        .expect("Message doesn't exist.");
+    let mut errors = vec![];
+    let pattern = msg.value().expect("Message has no value.");
+    let value = bundle.format_pattern(pattern, Some(&args), &mut errors);
+    assert_eq!(
+        "Beautiful! \u{2068}5\u{2069} people liked your message",
+        &value
+    );
+
+    let mut args = FluentArgs::new();
+    args.set("num", FluentValue::from(0));
+
+    let msg = bundle
+        .get_message("annotation")
+        .expect("Message doesn't exist.");
+    let mut errors = vec![];
+    let pattern = msg.value().expect("Message has no value.");
+    let value = bundle.format_pattern(pattern, Some(&args), &mut errors);
+    assert_eq!("Beautiful! No likes yet.", &value);
+}
diff --git a/fluent-syntax/src/parser/expression.rs b/fluent-syntax/src/parser/expression.rs
index c5ccb32b..ff6dfd9b 100644
--- a/fluent-syntax/src/parser/expression.rs
+++ b/fluent-syntax/src/parser/expression.rs
@@ -190,7 +190,7 @@ where
                     }
                     self.ptr += 1;
                     self.skip_blank();
-                    let val = self.get_inline_expression(true)?;
+                    let val = self.get_inline_expression(false)?;
 
                     argument_names.push(id.name.clone());
                     named.push(ast::NamedArgument {