Cisco ( CSCO) will take a charge of up to $500 million to account for last year's agreement to buy storage area networking start-up Andiamo.

The San Jose networking giant said in a Securities and Exchange Commission filing that it would recognize noncash costs of $200 million to $500 million to consolidate the switchmaker's results. The move would put Cisco in compliance with an accounting rule called FIN 46, regarding variable interest accounting, which was issued in January. The charge would cover the cost of Andiamo workers' stock and options.

Last August, Cisco agreed to acquire Andiamo for up to $2.5 billion in cash and stock, depending on Andiamo's hitting certain financial targets. The deal, expected to close some time next year, gave Cisco a leg up in the fiercely competitive and increasingly lucrative business of building storage area networks, offering investors a glimpse of the company's strategy of expanding its core communications-gear business.

On Monday, Cisco shares fell 47 cents, to $16.16, during a broad Nasdaq selloff.

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