diff --git a/src/generators/Generator.ts b/src/generators/Generator.ts
index e7243bc6c5..bd781c05fc 100644
--- a/src/generators/Generator.ts
+++ b/src/generators/Generator.ts
@@ -25,6 +25,51 @@ interface Computation {
 	deps: string[]
 }
 
+function detectIndentation(str: string) {
+	const pattern = /^[\t\s]{1,4}/gm;
+	let match;
+
+	while (match = pattern.exec(str)) {
+		if (match[0][0] === '\t') return '\t';
+		if (match[0].length === 2) return '  ';
+	}
+
+	return '    ';
+}
+
+function getIndentationLevel(str: string, b: number) {
+	let a = b;
+	while (a > 0 && str[a - 1] !== '\n') a -= 1;
+	return /^\s*/.exec(str.slice(a, b))[0];
+}
+
+function getIndentExclusionRanges(node: Node) {
+	const ranges: Node[] = [];
+	walk(node, {
+		enter(node: Node) {
+			if (node.type === 'TemplateElement') ranges.push(node);
+		}
+	});
+	return ranges;
+}
+
+function removeIndentation(
+	code: MagicString,
+	start: number,
+	end: number,
+	indentationLevel: string,
+	ranges: Node[]
+) {
+	const str = code.original.slice(start, end);
+	const pattern = new RegExp(`^${indentationLevel}`, 'gm');
+	let match;
+
+	while (match = pattern.exec(str)) {
+		// TODO bail if we're inside an exclusion range
+		code.remove(start + match.index, start + match.index + indentationLevel.length);
+	}
+}
+
 export default class Generator {
 	ast: Parsed;
 	parsed: Parsed;
@@ -45,7 +90,6 @@ export default class Generator {
 	importedComponents: Map<string, string>;
 	namespace: string;
 	hasComponents: boolean;
-	hasJs: boolean;
 	computations: Computation[];
 	templateProperties: Record<string, Node>;
 	slots: Set<string>;
@@ -409,7 +453,7 @@ export default class Generator {
 	}
 
 	parseJs() {
-		const { source } = this;
+		const { code, source } = this;
 		const { js } = this.parsed;
 
 		const imports = this.imports;
@@ -418,11 +462,14 @@ export default class Generator {
 		const componentDefinition = new CodeBuilder();
 
 		let namespace = null;
-		let hasJs = !!js;
 
 		if (js) {
 			this.addSourcemapLocations(js.content);
 
+			const indentation = detectIndentation(source.slice(js.start, js.end));
+			const indentationLevel = getIndentationLevel(source, js.content.body[0].start);
+			const indentExclusionRanges = getIndentExclusionRanges(js.content);
+
 			const scope = annotateWithScopes(js.content);
 			scope.declarations.forEach(name => {
 				this.userVars.add(name);
@@ -500,6 +547,12 @@ export default class Generator {
 					let name = this.getUniqueName(key);
 					this.templateVars.set(disambiguator ? `${disambiguator}-${key}` : key, name);
 
+					// deindent
+					const indentationLevel = getIndentationLevel(source, node.start);
+					if (indentationLevel) {
+						removeIndentation(code, node.start, node.end, indentationLevel, indentExclusionRanges);
+					}
+
 					// TODO disambiguate between different categories, and ensure
 					// no conflicts with existing aliases
 					if (node.type === 'ArrowFunctionExpression') {
@@ -624,35 +677,46 @@ export default class Generator {
 				}
 			}
 
-			// now that we've analysed the default export, we can determine whether or not we need to keep it
-			let hasDefaultExport = !!defaultExport;
-			if (defaultExport && defaultExport.declaration.properties.length === 0) {
-				hasDefaultExport = false;
-				removeNode(this.code, js.content, defaultExport);
-			}
-
 			// if we do need to keep it, then we need to replace `export default`
-			if (hasDefaultExport) {
-				this.code.overwrite(
-					defaultExport.start,
-					defaultExport.declaration.start,
-					`var ${this.alias('template')} = `
-				);
+			// if (defaultExport) {
+			// 	this.code.overwrite(
+			// 		defaultExport.start,
+			// 		defaultExport.declaration.start,
+			// 		`var ${this.alias('template')} = `
+			// 	);
+			// }
+
+			if (indentationLevel) {
+				if (defaultExport) {
+					removeIndentation(code, js.content.start, defaultExport.start, indentationLevel, indentExclusionRanges);
+					removeIndentation(code, defaultExport.end, js.content.end, indentationLevel, indentExclusionRanges);
+				} else {
+					removeIndentation(code, js.content.start, js.content.end, indentationLevel, indentExclusionRanges);
+				}
 			}
 
 			if (js.content.body.length === 0) {
 				// if there's no need to include user code, remove it altogether
 				this.code.remove(js.content.start, js.content.end);
-				hasJs = false;
 			}
 
-			this.javascript = hasDefaultExport ?
-				`[✂${js.content.start}-${defaultExport.start}✂]${componentDefinition}[✂${defaultExport.end}-${js.content.end}✂]` :
-				`[✂${js.content.start}-${js.content.end}✂]`;
+			let a = js.content.start;
+			while (/\s/.test(source[a])) a += 1;
+
+			let b = js.content.end;
+			while (/\s/.test(source[b - 1])) b -= 1;
+
+			if (defaultExport) {
+				this.javascript = '';
+				if (a !== defaultExport.start) this.javascript += `[✂${a}-${defaultExport.start}✂]`;
+				if (!componentDefinition.isEmpty()) this.javascript += componentDefinition;
+				if (defaultExport.end !== b) this.javascript += `[✂${defaultExport.end}-${b}✂]`;
+			} else {
+				this.javascript = a === b ? null : `[✂${a}-${b}✂]`;
+			}
 		}
 
 		this.computations = computations;
-		this.hasJs = hasJs;
 		this.namespace = namespace;
 		this.templateProperties = templateProperties;
 	}
diff --git a/src/generators/dom/index.ts b/src/generators/dom/index.ts
index eee9c5669c..e9fe9805c7 100644
--- a/src/generators/dom/index.ts
+++ b/src/generators/dom/index.ts
@@ -92,7 +92,6 @@ export default function dom(
 
 	const {
 		computations,
-		hasJs,
 		name,
 		templateProperties,
 		namespace,
@@ -338,7 +337,7 @@ export default function dom(
 			}
 		` : (!sharedPath && `${name}.prototype._recompute = @noop;`)}
 
-		${templateProperties.setup && `@template.setup(${name});`}
+		${templateProperties.setup && `%setup(${name});`}
 	`);
 
 	const usedHelpers = new Set();
diff --git a/src/generators/dom/visitors/Component.ts b/src/generators/dom/visitors/Component.ts
index 5085ee9969..67f647a755 100644
--- a/src/generators/dom/visitors/Component.ts
+++ b/src/generators/dom/visitors/Component.ts
@@ -219,7 +219,7 @@ export default function visitComponent(
 	const expression = node.name === ':Self'
 		? generator.name
 		: generator.importedComponents.get(node.name) ||
-				`@template.components.${node.name}`;
+				`@template.components.${node.name}`; // TODO this is out of date
 
 	block.builders.init.addBlock(deindent`
 		${statements.join('\n')}
diff --git a/src/generators/server-side-rendering/index.ts b/src/generators/server-side-rendering/index.ts
index 96f1b1fe40..58d410fbe6 100644
--- a/src/generators/server-side-rendering/index.ts
+++ b/src/generators/server-side-rendering/index.ts
@@ -82,7 +82,7 @@ export default function ssr(
 
 	const generator = new SsrGenerator(parsed, source, options.name || 'SvelteComponent', stylesheet, options);
 
-	const { computations, name, hasJs, templateProperties } = generator;
+	const { computations, name, templateProperties } = generator;
 
 	// create main render() function
 	const mainBlock = new Block({
diff --git a/src/generators/server-side-rendering/visitors/Component.ts b/src/generators/server-side-rendering/visitors/Component.ts
index 7af91a0aad..8c527ac361 100644
--- a/src/generators/server-side-rendering/visitors/Component.ts
+++ b/src/generators/server-side-rendering/visitors/Component.ts
@@ -72,7 +72,7 @@ export default function visitComponent(
 	const expression = node.name === ':Self'
 		? generator.name
 		: generator.importedComponents.get(node.name) ||
-				`@template.components.${node.name}`;
+				`@template.components.${node.name}`; // TODO out of date
 
 	bindings.forEach(binding => {
 		block.addBinding(binding, expression);
diff --git a/test/js/index.js b/test/js/index.js
index 3096bdf4c4..07bdc183de 100644
--- a/test/js/index.js
+++ b/test/js/index.js
@@ -4,7 +4,7 @@ import * as path from "path";
 import { rollup } from "rollup";
 import { loadConfig, svelte } from "../helpers.js";
 
-describe.skip("js", () => {
+describe("js", () => {
 	fs.readdirSync("test/js/samples").forEach(dir => {
 		if (dir[0] === ".") return;
 
@@ -62,13 +62,13 @@ describe.skip("js", () => {
 				);
 
 				assert.equal(
-					actual.trim().replace(/^\s+$/gm, ""),
-					expected.trim().replace(/^\s+$/gm, "")
+					actual.trim().replace(/^[ \t]+$/gm, ""),
+					expected.trim().replace(/^[ \t]+$/gm, "")
 				);
 
 				assert.equal(
-					code.trim().replace(/^\s+$/gm, ""),
-					expectedBundle.trim().replace(/^\s+$/gm, "")
+					code.trim().replace(/^[ \t]+$/gm, ""),
+					expectedBundle.trim().replace(/^[ \t]+$/gm, "")
 				);
 			}).catch(err => {
 				if (err.loc) console.error(err.loc);
diff --git a/test/js/samples/collapses-text-around-comments/expected-bundle.js b/test/js/samples/collapses-text-around-comments/expected-bundle.js
index 5d44708a27..a69b1fcc77 100644
--- a/test/js/samples/collapses-text-around-comments/expected-bundle.js
+++ b/test/js/samples/collapses-text-around-comments/expected-bundle.js
@@ -190,13 +190,9 @@ var proto = {
 };
 
 /* generated by Svelte vX.Y.Z */
-var template = (function() {
-	return {
-		data: function () {
-			return { foo: 42 }
-		}
-	};
-}());
+function data() {
+	return { foo: 42 }
+}
 
 function encapsulateStyles(node) {
 	setAttribute(node, "svelte-3590263702", "");
@@ -244,7 +240,7 @@ function create_main_fragment(state, component) {
 
 function SvelteComponent(options) {
 	init(this, options);
-	this._state = assign(template.data(), options.data);
+	this._state = assign(data(), options.data);
 
 	if (!document.getElementById("svelte-3590263702-style")) add_css();
 
diff --git a/test/js/samples/collapses-text-around-comments/expected.js b/test/js/samples/collapses-text-around-comments/expected.js
index 83841b4eb8..f19c316d12 100644
--- a/test/js/samples/collapses-text-around-comments/expected.js
+++ b/test/js/samples/collapses-text-around-comments/expected.js
@@ -1,13 +1,9 @@
 /* generated by Svelte vX.Y.Z */
 import { appendNode, assign, createElement, createText, detachNode, init, insertNode, noop, proto, setAttribute } from "svelte/shared.js";
 
-var template = (function() {
-	return {
-		data: function () {
-			return { foo: 42 }
-		}
-	};
-}());
+function data() {
+	return { foo: 42 }
+};
 
 function encapsulateStyles(node) {
 	setAttribute(node, "svelte-3590263702", "");
@@ -55,7 +51,7 @@ function create_main_fragment(state, component) {
 
 function SvelteComponent(options) {
 	init(this, options);
-	this._state = assign(template.data(), options.data);
+	this._state = assign(data(), options.data);
 
 	if (!document.getElementById("svelte-3590263702-style")) add_css();
 
diff --git a/test/js/samples/component-static/expected-bundle.js b/test/js/samples/component-static/expected-bundle.js
index a9769110cb..fc1860c060 100644
--- a/test/js/samples/component-static/expected-bundle.js
+++ b/test/js/samples/component-static/expected-bundle.js
@@ -166,17 +166,11 @@ var proto = {
 };
 
 /* generated by Svelte vX.Y.Z */
-var template = (function() {
-	return {
-		components: {
-			Nested: window.Nested
-		}
-	};
-}());
+var Nested = window.Nested;
 
 function create_main_fragment(state, component) {
 
-	var nested = new template.components.Nested({
+	var nested = new Nested({
 		_root: component._root,
 		data: { foo: "bar" }
 	});
diff --git a/test/js/samples/component-static/expected.js b/test/js/samples/component-static/expected.js
index 8a22292037..593f8b6a89 100644
--- a/test/js/samples/component-static/expected.js
+++ b/test/js/samples/component-static/expected.js
@@ -1,17 +1,11 @@
 /* generated by Svelte vX.Y.Z */
 import { assign, callAll, init, noop, proto } from "svelte/shared.js";
 
-var template = (function() {
-	return {
-		components: {
-			Nested: window.Nested
-		}
-	};
-}());
+var Nested = window.Nested;
 
 function create_main_fragment(state, component) {
 
-	var nested = new template.components.Nested({
+	var nested = new Nested({
 		_root: component._root,
 		data: { foo: "bar" }
 	});
diff --git a/test/js/samples/computed-collapsed-if/expected-bundle.js b/test/js/samples/computed-collapsed-if/expected-bundle.js
index e6e9152b1e..013e7f1bbc 100644
--- a/test/js/samples/computed-collapsed-if/expected-bundle.js
+++ b/test/js/samples/computed-collapsed-if/expected-bundle.js
@@ -166,14 +166,13 @@ var proto = {
 };
 
 /* generated by Svelte vX.Y.Z */
-var template = (function() {
-	return {
-		computed: {
-			a: x => x * 2,
-			b: x => x * 3
-		}
-	};
-}());
+function a(x) {
+	return x * 2;
+}
+
+function b(x) {
+	return x * 3;
+}
 
 function create_main_fragment(state, component) {
 
@@ -207,8 +206,8 @@ assign(SvelteComponent.prototype, proto);
 
 SvelteComponent.prototype._recompute = function _recompute(changed, state) {
 	if (changed.x) {
-		if (differs(state.a, (state.a = template.computed.a(state.x)))) changed.a = true;
-		if (differs(state.b, (state.b = template.computed.b(state.x)))) changed.b = true;
+		if (differs(state.a, (state.a = a(state.x)))) changed.a = true;
+		if (differs(state.b, (state.b = b(state.x)))) changed.b = true;
 	}
 };
 
diff --git a/test/js/samples/computed-collapsed-if/expected.js b/test/js/samples/computed-collapsed-if/expected.js
index 7b9207a955..21cd8bc338 100644
--- a/test/js/samples/computed-collapsed-if/expected.js
+++ b/test/js/samples/computed-collapsed-if/expected.js
@@ -1,14 +1,13 @@
 /* generated by Svelte vX.Y.Z */
 import { assign, differs, init, noop, proto } from "svelte/shared.js";
 
-var template = (function() {
-	return {
-		computed: {
-			a: x => x * 2,
-			b: x => x * 3
-		}
-	};
-}());
+function a(x) {
+	return x * 2;
+}
+
+function b(x) {
+	return x * 3;
+}
 
 function create_main_fragment(state, component) {
 
@@ -42,8 +41,8 @@ assign(SvelteComponent.prototype, proto);
 
 SvelteComponent.prototype._recompute = function _recompute(changed, state) {
 	if (changed.x) {
-		if (differs(state.a, (state.a = template.computed.a(state.x)))) changed.a = true;
-		if (differs(state.b, (state.b = template.computed.b(state.x)))) changed.b = true;
+		if (differs(state.a, (state.a = a(state.x)))) changed.a = true;
+		if (differs(state.b, (state.b = b(state.x)))) changed.b = true;
 	}
 }
 export default SvelteComponent;
\ No newline at end of file
diff --git a/test/js/samples/event-handlers-custom/expected-bundle.js b/test/js/samples/event-handlers-custom/expected-bundle.js
index 7b896bf8f1..d6794a3cfb 100644
--- a/test/js/samples/event-handlers-custom/expected-bundle.js
+++ b/test/js/samples/event-handlers-custom/expected-bundle.js
@@ -178,20 +178,15 @@ var proto = {
 };
 
 /* generated by Svelte vX.Y.Z */
-var template = (function() {
-	return {
-		methods: {
-			foo ( bar ) {
-				console.log( bar );
-			}
-		},
-		events: {
-			foo ( node, callback ) {
-				// code goes here
-			}
-		}
-	};
-}());
+function foo( node, callback ) {
+	// code goes here
+}
+
+var methods = {
+	foo ( bar ) {
+		console.log( bar );
+	}
+};
 
 function create_main_fragment(state, component) {
 	var button, foo_handler;
@@ -204,7 +199,7 @@ function create_main_fragment(state, component) {
 		},
 
 		hydrate: function() {
-			foo_handler = template.events.foo.call(component, button, function(event) {
+			foo_handler = foo.call(component, button, function(event) {
 				var state = component.get();
 				component.foo( state.bar );
 			});
@@ -238,6 +233,6 @@ function SvelteComponent(options) {
 	}
 }
 
-assign(SvelteComponent.prototype, template.methods, proto);
+assign(SvelteComponent.prototype, methods, proto);
 
 export default SvelteComponent;
diff --git a/test/js/samples/event-handlers-custom/expected.js b/test/js/samples/event-handlers-custom/expected.js
index 34832b6000..ebf6a8ee03 100644
--- a/test/js/samples/event-handlers-custom/expected.js
+++ b/test/js/samples/event-handlers-custom/expected.js
@@ -1,20 +1,15 @@
 /* generated by Svelte vX.Y.Z */
 import { assign, createElement, detachNode, init, insertNode, noop, proto } from "svelte/shared.js";
 
-var template = (function() {
-	return {
-		methods: {
-			foo ( bar ) {
-				console.log( bar );
-			}
-		},
-		events: {
-			foo ( node, callback ) {
-				// code goes here
-			}
-		}
-	};
-}());
+function foo( node, callback ) {
+	// code goes here
+};
+
+var methods = {
+	foo ( bar ) {
+		console.log( bar );
+	}
+};
 
 function create_main_fragment(state, component) {
 	var button, foo_handler;
@@ -27,7 +22,7 @@ function create_main_fragment(state, component) {
 		},
 
 		hydrate: function() {
-			foo_handler = template.events.foo.call(component, button, function(event) {
+			foo_handler = foo.call(component, button, function(event) {
 				var state = component.get();
 				component.foo( state.bar );
 			});
@@ -61,5 +56,5 @@ function SvelteComponent(options) {
 	}
 }
 
-assign(SvelteComponent.prototype, template.methods, proto);
+assign(SvelteComponent.prototype, methods, proto);
 export default SvelteComponent;
\ No newline at end of file
diff --git a/test/js/samples/non-imported-component/expected-bundle.js b/test/js/samples/non-imported-component/expected-bundle.js
index 2252eb1635..9a68b51d17 100644
--- a/test/js/samples/non-imported-component/expected-bundle.js
+++ b/test/js/samples/non-imported-component/expected-bundle.js
@@ -180,14 +180,6 @@ var proto = {
 };
 
 /* generated by Svelte vX.Y.Z */
-var template = (function() {
-	return {
-		components: {
-			NonImported
-		}
-	};
-}());
-
 function create_main_fragment(state, component) {
 	var text;
 
@@ -195,7 +187,7 @@ function create_main_fragment(state, component) {
 		_root: component._root
 	});
 
-	var nonimported = new template.components.NonImported({
+	var nonimported = new NonImported({
 		_root: component._root
 	});
 
diff --git a/test/js/samples/non-imported-component/expected.js b/test/js/samples/non-imported-component/expected.js
index e424bb6ffd..6959e54da5 100644
--- a/test/js/samples/non-imported-component/expected.js
+++ b/test/js/samples/non-imported-component/expected.js
@@ -2,13 +2,7 @@
 import { assign, callAll, createText, detachNode, init, insertNode, noop, proto } from "svelte/shared.js";
 import Imported from 'Imported.html';
 
-var template = (function() {
-	return {
-		components: {
-			NonImported
-		}
-	};
-}());
+
 
 function create_main_fragment(state, component) {
 	var text;
@@ -17,7 +11,7 @@ function create_main_fragment(state, component) {
 		_root: component._root
 	});
 
-	var nonimported = new template.components.NonImported({
+	var nonimported = new NonImported({
 		_root: component._root
 	});
 
diff --git a/test/js/samples/onrender-onteardown-rewritten/expected-bundle.js b/test/js/samples/onrender-onteardown-rewritten/expected-bundle.js
index bebd336b6c..bf7688dc3a 100644
--- a/test/js/samples/onrender-onteardown-rewritten/expected-bundle.js
+++ b/test/js/samples/onrender-onteardown-rewritten/expected-bundle.js
@@ -166,13 +166,9 @@ var proto = {
 };
 
 /* generated by Svelte vX.Y.Z */
-var template = (function() {
-	return {
-		// this test should be removed in v2
-		oncreate () {},
-		ondestroy () {}
-	};
-}());
+function oncreate() {}
+
+function ondestroy() {}
 
 function create_main_fragment(state, component) {
 
@@ -193,14 +189,14 @@ function SvelteComponent(options) {
 	init(this, options);
 	this._state = options.data || {};
 
-	this._handlers.destroy = [template.ondestroy];
+	this._handlers.destroy = [ondestroy];
 
-	var oncreate = template.oncreate.bind(this);
+	var _oncreate = oncreate.bind(this);
 
 	if (!options._root) {
-		this._oncreate = [oncreate];
+		this._oncreate = [_oncreate];
 	} else {
-	 	this._root._oncreate.push(oncreate);
+	 	this._root._oncreate.push(_oncreate);
 	 }
 
 	this._fragment = create_main_fragment(this._state, this);
diff --git a/test/js/samples/onrender-onteardown-rewritten/expected.js b/test/js/samples/onrender-onteardown-rewritten/expected.js
index d29f9fd752..21a5d0ed86 100644
--- a/test/js/samples/onrender-onteardown-rewritten/expected.js
+++ b/test/js/samples/onrender-onteardown-rewritten/expected.js
@@ -1,13 +1,9 @@
 /* generated by Svelte vX.Y.Z */
 import { assign, callAll, init, noop, proto } from "svelte/shared.js";
 
-var template = (function() {
-	return {
-		// this test should be removed in v2
-		oncreate () {},
-		ondestroy () {}
-	};
-}());
+function oncreate() {};
+
+function ondestroy() {};
 
 function create_main_fragment(state, component) {
 
@@ -28,14 +24,14 @@ function SvelteComponent(options) {
 	init(this, options);
 	this._state = options.data || {};
 
-	this._handlers.destroy = [template.ondestroy]
+	this._handlers.destroy = [ondestroy]
 
-	var oncreate = template.oncreate.bind(this);
+	var _oncreate = oncreate.bind(this);
 
 	if (!options._root) {
-		this._oncreate = [oncreate];
+		this._oncreate = [_oncreate];
 	} else {
-	 	this._root._oncreate.push(oncreate);
+	 	this._root._oncreate.push(_oncreate);
 	 }
 
 	this._fragment = create_main_fragment(this._state, this);
diff --git a/test/js/samples/setup-method/expected-bundle.js b/test/js/samples/setup-method/expected-bundle.js
index 85bc643281..f92175d261 100644
--- a/test/js/samples/setup-method/expected-bundle.js
+++ b/test/js/samples/setup-method/expected-bundle.js
@@ -166,24 +166,21 @@ var proto = {
 };
 
 /* generated by Svelte vX.Y.Z */
-var template = (function() {
-	return {
-		methods: {
-			foo ( bar ) {
-				console.log( bar );
-			}
-		},
-		setup: (Component) => {
-			Component.SOME_CONSTANT = 42;
-			Component.factory = function (target) {
-				return new Component({
-					target: target
-				});
-			};
-			Component.prototype.foo( 'baz' );
-		}
+var methods = {
+	foo ( bar ) {
+		console.log( bar );
+	}
+};
+
+function setup(Component) {
+	Component.SOME_CONSTANT = 42;
+	Component.factory = function (target) {
+		return new Component({
+			target: target
+		});
 	};
-}());
+	Component.prototype.foo( 'baz' );
+}
 
 function create_main_fragment(state, component) {
 
@@ -212,8 +209,8 @@ function SvelteComponent(options) {
 	}
 }
 
-assign(SvelteComponent.prototype, template.methods, proto);
+assign(SvelteComponent.prototype, methods, proto);
 
-template.setup(SvelteComponent);
+setup(SvelteComponent);
 
 export default SvelteComponent;
diff --git a/test/js/samples/setup-method/expected.js b/test/js/samples/setup-method/expected.js
index b3bd9fcc8e..cfacd329dc 100644
--- a/test/js/samples/setup-method/expected.js
+++ b/test/js/samples/setup-method/expected.js
@@ -1,24 +1,21 @@
 /* generated by Svelte vX.Y.Z */
 import { assign, init, noop, proto } from "svelte/shared.js";
 
-var template = (function() {
-	return {
-		methods: {
-			foo ( bar ) {
-				console.log( bar );
-			}
-		},
-		setup: (Component) => {
-			Component.SOME_CONSTANT = 42;
-			Component.factory = function (target) {
-				return new Component({
-					target: target
-				});
-			}
-			Component.prototype.foo( 'baz' );
-		}
-	};
-}());
+var methods = {
+	foo ( bar ) {
+		console.log( bar );
+	}
+};
+
+function setup(Component) {
+	Component.SOME_CONSTANT = 42;
+	Component.factory = function (target) {
+		return new Component({
+			target: target
+		});
+	}
+	Component.prototype.foo( 'baz' );
+}
 
 function create_main_fragment(state, component) {
 
@@ -47,7 +44,7 @@ function SvelteComponent(options) {
 	}
 }
 
-assign(SvelteComponent.prototype, template.methods, proto);
+assign(SvelteComponent.prototype, methods, proto);
 
-template.setup(SvelteComponent);
+setup(SvelteComponent);
 export default SvelteComponent;
\ No newline at end of file
diff --git a/test/runtime/samples/setup/_config.js b/test/runtime/samples/setup/_config.js
new file mode 100644
index 0000000000..47b0cf332e
--- /dev/null
+++ b/test/runtime/samples/setup/_config.js
@@ -0,0 +1,5 @@
+export default {
+	test(assert, component) {
+		assert.ok(component.constructor.FOO);
+	}
+};
\ No newline at end of file
diff --git a/test/runtime/samples/setup/main.html b/test/runtime/samples/setup/main.html
new file mode 100644
index 0000000000..a1192323c9
--- /dev/null
+++ b/test/runtime/samples/setup/main.html
@@ -0,0 +1,7 @@
+<script>
+	export default {
+		setup(Component) {
+			Component.FOO = true;
+		}
+	};
+</script>
\ No newline at end of file