diff --git a/gcc/fortran/decl.c b/gcc/fortran/decl.c
index 52c2a624b6e..d854b2a0307 100644
--- a/gcc/fortran/decl.c
+++ b/gcc/fortran/decl.c
@@ -1889,13 +1889,16 @@ add_init_expr_to_sym (const char *name, gfc_expr **initp, locus *var_locus)
 
   /* If this symbol is confirming an implicit parameter type,
      then an initialization expression is not allowed.  */
-  if (attr.flavor == FL_PARAMETER
-      && sym->value != NULL
-      && *initp != NULL)
+  if (attr.flavor == FL_PARAMETER && sym->value != NULL)
     {
-      gfc_error ("Initializer not allowed for PARAMETER %qs at %C",
-		 sym->name);
-      return false;
+      if (*initp != NULL)
+	{
+	  gfc_error ("Initializer not allowed for PARAMETER %qs at %C",
+		     sym->name);
+	  return false;
+	}
+      else
+	return true;
     }
 
   if (init == NULL)
diff --git a/gcc/testsuite/gfortran.dg/pr96038.f90 b/gcc/testsuite/gfortran.dg/pr96038.f90
new file mode 100644
index 00000000000..f1098f33c1b
--- /dev/null
+++ b/gcc/testsuite/gfortran.dg/pr96038.f90
@@ -0,0 +1,8 @@
+! { dg-do compile }
+
+function ifoo()
+  parameter (n = 50)
+  integer n
+  ifoo = n
+end
+