diff --git a/templates/terraform/nested_query.go.erb b/templates/terraform/nested_query.go.erb
index b6acb6212de2..5d30f22d98a0 100644
--- a/templates/terraform/nested_query.go.erb
+++ b/templates/terraform/nested_query.go.erb
@@ -1,54 +1,72 @@
-	var v interface{}
-	var ok bool
+var v interface{}
+var ok bool
 
 <% object.nested_query.keys[0...-1].each do |k| -%>
-	v, ok = res["<%=k-%>"]
-	if !ok || v == nil {
-		return nil, nil
-	}
-	res = v.(map[string]interface{})
+v, ok = res["<%=k-%>"]
+if !ok || v == nil {
+  return nil, nil
+}
+res = v.(map[string]interface{})
 
 <% end -%>
-	v, ok = res["<%=object.nested_query.keys[-1]-%>"]
-	if !ok || v == nil {
-		return nil, nil
-	}
-
-  // Final nested resource is either a list of resources we need to filter
-	// or just the resource itself, which we return.
-	switch v.(type) {
-	case []interface{}:
-		break
-	case map[string]interface{}:
-		return v.(map[string]interface{}), nil
-	default:
-		return nil, fmt.Errorf("invalid value for <%= object.nested_query.keys.join(".") -%>: %v", v)
-	}
-
-	items := v.([]interface{})
-	for _, vRaw := range items {
+v, ok = res["<%=object.nested_query.keys[-1]-%>"]
+if !ok || v == nil {
+  return nil, nil
+}
+
+switch v.(type) {
+case []interface{}:
+  break
+case map[string]interface{}:
+  // Construct list out of single nested resource
+  v = []interface{}{v}
+default:
+  return nil, fmt.Errorf("expected list or map for value <%= object.nested_query.keys.join(".") -%>. Actual value: %v", v)
+}
+
+<% object.identity.each do |prop| -%>
+<% if settable_properties.include?(prop) -%>
+expected<%= titlelize_property(prop) -%>, err := expand<%= resource_name -%><%= titlelize_property(prop) -%>(d.Get("<%= prop.name.underscore -%>"), d, meta.(*Config))
+if err != nil {
+  return nil, err
+}
+<% else -%>
+expected<%= titlelize_property(prop) -%> := d.Get("<%= prop.name.underscore -%>")
+<% end # settable_properties.include?(prop)-%>
+<% end # object.identity.each -%>
+
+// Search list for this resource.
+items := v.([]interface{})
+for _, itemRaw := range items {
+	if itemRaw == nil {
+    continue
+  }
 	<% if object.nested_query.is_list_of_ids -%>
-		// If only an id is given in parent resource,
-		// construct a resource map for that id KV pair.
-		item := map[string]interface{}{"<%=object.identity.first.api_name%>": vRaw}
+  // List response only contains the ID - construct a response object.
+  item := map[string]interface{}{
+    "<%=object.identity.first.api_name%>": itemRaw,
+  }
 	<% else -%>
-		item := vRaw.(map[string]interface{})
+  item := itemRaw.(map[string]interface{})
+	<% end -%>
+
+	<% if object.custom_code.decoder -%>
+  // Decode list item before comparing.
+  item, err := resource<%= resource_name -%>Decoder(d, meta, item)
+  if err != nil {
+      return nil, err
+  }
 	<% end -%>
+
 	<% object.identity.each do |prop| -%>
-	<% if settable_properties.include?(prop) -%>
-		itemIdV, err := expand<%= resource_name -%><%= titlelize_property(prop) -%>(d.Get("<%= prop.name.underscore -%>"), d, meta.(*Config))
-		if err != nil {
-			return nil, err
-		}
-	<% else -%>
-		itemIdV := d.Get("<%= prop.name.underscore -%>")
-	<% end # settable_properties.include?(prop)-%>
-		actualIdV := flatten<%= resource_name -%><%= titlelize_property(prop) -%>(item["<%= prop.api_name %>"], d)
-		log.Printf("[DEBUG] Checking if item's <%= prop.api_name %> (%#v) is equal to resource's (%#v)", itemIdV, actualIdV)
-		if !reflect.DeepEqual(itemIdV, actualIdV) {
-			continue
-		}
-	<% end # object.identity.each -%>
-		return item, nil
-	}
-	return nil, nil
+	item<%= titlelize_property(prop) -%> := flatten<%= resource_name -%><%= titlelize_property(prop) -%>(item["<%= prop.api_name %>"], d)
+  if !reflect.DeepEqual(item<%= titlelize_property(prop) -%>, expected<%= titlelize_property(prop) -%>) {
+  	log.Printf("[DEBUG] Skipping item with <%= prop.api_name %>= %#v, looking for %#v)", item<%= titlelize_property(prop) -%>, expected<%= titlelize_property(prop) -%>)
+    continue
+  }
+  <% end -%>
+	log.Printf("[DEBUG] Found item for resource %q: %#v)", d.Id(), item)
+  return item, nil
+}
+
+return nil, nil
diff --git a/templates/terraform/resource.erb b/templates/terraform/resource.erb
index 2872cb6b2eb5..b51b212abe56 100644
--- a/templates/terraform/resource.erb
+++ b/templates/terraform/resource.erb
@@ -578,15 +578,15 @@ func resource<%= resource_name -%>UpdateEncoder(d *schema.ResourceData, meta int
 <% end -%>
 
 <%  if object.nested_query -%>
+<%# Note that if both nested_uqery and custom_code.decoder are provided,
+  #the decoder will be included via nested_query.go.erb -%>
 func flattenNested<%= resource_name -%>(d *schema.ResourceData, meta interface{}, res map[string]interface{}) (map[string]interface{}, error) {
     <%=     compile_template('templates/terraform/nested_query.go.erb',
                          object: object,
                          settable_properties: object.settable_properties,
                          resource_name: resource_name) -%>
 }
-<% end -%>
-
-<% if object.custom_code.decoder -%>
+<% elsif object.custom_code.decoder -%>
 func resource<%= resource_name -%>Decoder(d *schema.ResourceData, meta interface{}, res map[string]interface{}) (map[string]interface{}, error) {
 <%= lines(compile(object.custom_code.decoder)) -%>
 }