diff --git a/lnwallet/channel.go b/lnwallet/channel.go
index b7eaef34..974ddd7c 100644
--- a/lnwallet/channel.go
+++ b/lnwallet/channel.go
@@ -3152,14 +3152,15 @@ func (lc *LightningChannel) FailHTLC(rHash [32]byte) (uint64, error) {
 // ReceiveFailHTLC attempts to cancel a targeted HTLC by its log index,
 // inserting an entry which will remove the target log entry within the next
 // commitment update. This method should be called in response to the upstream
-// party cancelling an outgoing HTLC.
-func (lc *LightningChannel) ReceiveFailHTLC(logIndex uint64) error {
+// party cancelling an outgoing HTLC. The value of the failed HTLC is returned
+// along with an error indicating success.
+func (lc *LightningChannel) ReceiveFailHTLC(logIndex uint64) (lnwire.MilliSatoshi, error) {
 	lc.Lock()
 	defer lc.Unlock()
 
 	htlc := lc.localUpdateLog.lookup(logIndex)
 	if htlc == nil {
-		return fmt.Errorf("unable to find HTLC to fail")
+		return 0, fmt.Errorf("unable to find HTLC to fail")
 	}
 
 	pd := &PaymentDescriptor{
@@ -3172,7 +3173,8 @@ func (lc *LightningChannel) ReceiveFailHTLC(logIndex uint64) error {
 
 	lc.remoteUpdateLog.appendUpdate(pd)
 	lc.availableLocalBalance += pd.Amount
-	return nil
+
+	return htlc.Amount, nil
 }
 
 // ChannelPoint returns the outpoint of the original funding transaction which
diff --git a/lnwallet/channel_test.go b/lnwallet/channel_test.go
index ff3780e1..7e17c5b1 100644
--- a/lnwallet/channel_test.go
+++ b/lnwallet/channel_test.go
@@ -506,7 +506,7 @@ func TestSimpleAddSettleWorkflow(t *testing.T) {
 	// also be able to forward an HTLC now that the HTLC has been locked
 	// into both commitment transactions.
 	if htlcs, err := bobChannel.ReceiveRevocation(aliceRevocation); err != nil {
-		t.Fatalf("bob unable to process alive's revocation: %v", err)
+		t.Fatalf("bob unable to process alice's revocation: %v", err)
 	} else if len(htlcs) != 1 {
 		t.Fatalf("bob should be able to forward an HTLC, instead can "+
 			"forward %v", len(htlcs))
@@ -1538,7 +1538,7 @@ func TestCancelHTLC(t *testing.T) {
 	if err != nil {
 		t.Fatalf("unable to cancel HTLC: %v", err)
 	}
-	if err := aliceChannel.ReceiveFailHTLC(htlcCancelIndex); err != nil {
+	if _, err := aliceChannel.ReceiveFailHTLC(htlcCancelIndex); err != nil {
 		t.Fatalf("unable to recv htlc cancel: %v", err)
 	}
 
@@ -1891,7 +1891,7 @@ func TestUpdateFeeSenderCommits(t *testing.T) {
 
 	// Bob receives revocation from Alice.
 	if _, err := bobChannel.ReceiveRevocation(aliceRevocation); err != nil {
-		t.Fatalf("bob unable to process alive's revocation: %v", err)
+		t.Fatalf("bob unable to process alice's revocation: %v", err)
 	}
 
 }
@@ -2003,7 +2003,7 @@ func TestUpdateFeeReceiverCommits(t *testing.T) {
 	// Alice receives revokation from Bob, and can now be sure that Bob
 	// received the two updates, and they are considered locked in.
 	if _, err := aliceChannel.ReceiveRevocation(bobRevocation); err != nil {
-		t.Fatalf("bob unable to process alive's revocation: %v", err)
+		t.Fatalf("bob unable to process alice's revocation: %v", err)
 	}
 
 	// Alice will receive the signature from Bob, which will cover what was
@@ -2030,7 +2030,7 @@ func TestUpdateFeeReceiverCommits(t *testing.T) {
 
 	// Bob receives revocation from Alice.
 	if _, err := bobChannel.ReceiveRevocation(aliceRevocation); err != nil {
-		t.Fatalf("bob unable to process alive's revocation: %v", err)
+		t.Fatalf("bob unable to process alice's revocation: %v", err)
 	}
 }
 
@@ -2170,7 +2170,9 @@ func TestUpdateFeeMultipleUpdates(t *testing.T) {
 
 	// Bob receives revocation from Alice.
 	if _, err := bobChannel.ReceiveRevocation(aliceRevocation); err != nil {
-		t.Fatalf("bob unable to process alive's revocation: %v", err)
+		t.Fatalf("bob unable to process alice's revocation: %v", err)
+	}
+}
 
 // TestAddHTLCNegativeBalance tests that if enough HTLC's are added to the
 // state machine to drive the balance to zero, then the next HTLC attempted to