Re:

> Is it possible to to thid kind of stateful processing using XSLT/xt?
> I have a feeling that it's not possible?
> 
> The algorithm could be:
> Set a variable "fdn" by taking the "fdn" of the parent and add the name of the current instance.

Yes it is, but no, not like that.  You have to think at it differently:
think of selecting ancestor::* and concatenating their names with
recursion.  See the FAQ for examples of things like this (it's under
something like 'how do I print the element hierarchy).

 Steve


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