I am trying to modify an xsl which is of the older version. I come across the following:
FormatAccount(this)
Embedded extension functions in other language is not the content model of XSLT.
Extension elements and extension functions are part of the content model as described in http://www.w3.org/TR/xslt#extension : it's implementation dependant how exactly an XSLT processor register those extensions.
As pointed by @Martin Honnen's answer, in XSLT 2.0 you can declare "stylesheet functions" with XSLT itself.