CRA recommends that if a donation of a non-cash (in-kind) item is being made to a Canadian registered charity and it is worth more than $1000 that it be appraised by a knowledgeable, qualified and independent third party appraiser. For donations of in-kind goods of less than $1000 CRA suggests a “qualified staff member” can appraise the gift.  I would suggest that if you are trying to determine the fair market value of certain items that even if the items are worth less than a $1000 it is a good idea to get a proper appraisal – for example items that have been commonly abused such as art or bulk purchases.  Remember that the wholesale value of an item is often far less than the retail value and can sometimes be less than 1% of the retail cost.  If you are buying 500,000 cans of Diet Coke (as I frequently do!) you would not do so through a vending machine!  Also remember that if you cannot value either the donation or the advantage then the charity cannot issue a receipt.

http://www.cra-arc.gc.ca/chrts-gvng/chrts/plcy/csp/csp-f07-eng.html

Summary Policy
Date
September 3, 2003
Reference Number
CSP – F07
Key Words
Fair market value (appraisal)
Policy Statement
The fair market value of a gift in kind as of the date of the donation must be determined before an amount can be recorded on an official donation receipt.
If the fair market value of a gift is $1,000 or less, a qualified staff member of the registered charity receiving the gift can appraise the gift. If the fair market value is more than $1,000, the Charities Directorate strongly recommends that the property be appraised by someone who is not associated with either the donor or the charity receiving the gift (i.e., a third party). The person who determines the fair market value of the property must be competent and qualified to evaluate the particular property being transferred by way of a gift.
References
• Fair Market Value, CSP – F02.
• Gift (donation), CSP – G01.
• Receipt, CSP – R02.
• Gifts and Income Tax, P113.
• Gifts in Kind to Charity and Others, IT-297.
• Income Tax Regulations, C.R.C. 1978, c. 945, ss. 3501(1) and (1.1).

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Here is some further information from CRA with respect to appraisals:

Gifts in kind
A gift in kind refers to a gift of property other than cash such as capital property (including depreciable property) and personal-use property (including listed personal property). These terms are defined in the section “Definitions” in Guide T4037, Capital Gains. A gift in kind does not include a gift of services.
Do you have property to donate?
Here are some things to keep in mind when you donate property:
• If you plan to give away property, any capital gain you have made on the property since you got it may be subject to tax. For more information, see “Capital gains and losses”.
• Your own situation will affect the tax status of the gift. If you are an artist, dealer, or collector, different tax rules apply when you donate property from your inventory.
• You have to decide where you are going to donate your property. We cannot advise which museum, art gallery, archive, municipality, or institution you should approach. Remember that the tax implications may differ depending on the way in which you make the gift and to whom.
• Once you have chosen a qualified donee, and have determined that it is willing to accept your gift, you or the qualified donee may need to have the property appraised to determine its fair market value.
Donation appraisals
Donors and qualified donees often approach appraisers, dealers, and other people who are knowledgeable about particular objects to get appraisals for income tax purposes. Determining fair market value (FMV), is a complex process. You must consider numerous facts regarding the property.
You may need to get one or more appraisals to establish the FMV of the property you are donating. Use the appraised FMV to calculate the eligible amount of the gift unless the deemed FMV rules apply. The eligible amount is used to calculate the tax credit you can claim on your return. The appraised FMV is also used in calculating any capital gain or loss you may have from donating your property.

Who should appraise a gift?
For every situation, whether the property is personal property, real property, or intangible property, donors and qualified donees are encouraged to contact a professional appraiser, valuator, or other individual who is accredited in the field of valuation. That individual should be knowledgeable about the principles, theories, and procedures of the applicable valuation discipline and follow the Uniform Standards of Professional Appraisal Practice or the standards of the profession. Also, he or she should be knowledgeable about and active in the marketplace for the specific property.
The chosen individual should be independent. For instance, he or she should not be associated with the donor, the qualified donee, or another party associated with the purchase, sale, or donation of the property.
The individual should also be knowledgeable about the elements of a properly prepared and credible valuation report.
Gifts of property with an FMV of less than $1,000 will probably not require a professional appraisal, but the donor should keep all documents supporting the determination of the FMV, in case we ask to see them.
The appraisal report
The appraisal or valuation report should be based on the principles, theories, and procedures of the applicable valuation discipline and follow the standards of the profession. The report has to be an estimate of the FMV of the property as of the date of donation. Also, if you owned the property on Valuation Day (December 31, 1971), you may need to get a valuation reflecting the value on that date.
Note
The Canadian Cultural Property Export Review Board (CCPERB) has requirements for appraisals. Before applying for certification, please consult the Review Board Secretariat. For the contact information for the secretariat, see “Designated institutions and public authorities”.