Cite as: 520 U. S. 953 (1997)
Opinion of the Court
sess and sell the collateral and nothing more[,] . . . the valuation should start with what the creditor could realize by exercising that right." Ibid. This foreclosure-value standard, the Fifth Circuit found, was consistent with the other relevant provisions of the Code, economic analysis, and the legislative history of the pertinent provisions. See id., at 1045-1059. Judge Smith, joined by five other judges, dissented, urging that the Code dictates a replacement-value standard. See id., at 1061-1075.
Courts of Appeals have adopted three different standards for valuing a security interest in a bankruptcy proceeding when the debtor invokes the cram down power to retain the collateral over the creditor's objection. In contrast to the Fifth Circuit's foreclosure-value standard, a number of Circuits have followed a replacement-value approach. See, e. g., In re Taffi, 96 F. 3d 1190, 1191-1192 (CA9 1996) (en banc), cert. pending sub nom. Taffi v. United States, No. 96- 881; 2 In re Winthrop Old Farm Nurseries, Inc., 50 F. 3d 72, 74-75 (CA1 1995); In re Trimble, 50 F. 3d 530, 531-532 (CA8 1995). Other courts have settled on the midpoint between foreclosure value and replacement value. See In re Hoskins, 102 F. 3d 311, 316 (CA7 1996); cf. In re Valenti, 105 F. 3d 55, 62 (CA2 1997) (bankruptcy courts have discretion to value at midpoint between replacement value and foreclo-sure value). We granted certiorari to resolve this conflict among the Courts of Appeals, see 519 U. S. 1086 (1997), and we now reverse the Fifth Circuit's judgment.
2 In In re Taffi, the Ninth Circuit contrasted replacement value with fair-market value and adopted the latter standard, apparently viewing the two standards as incompatible. See 96 F. 3d, at 1192. By using the term "replacement value," we do not suggest that a creditor is entitled to recover what it would cost the debtor to purchase the collateral brand new. Rather, our use of the term replacement value is consistent with the Ninth Circuit's understanding of the meaning of fair-market value; by replacement value, we mean the price a willing buyer in the debtor's trade, business, or situation would pay a willing seller to obtain property of like age and condition. See also infra, at 965, n. 6.
959
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