These have to do with the Exchange Rates...
Exchange rates time definition rule:
Reporting time Indicates what time stamp should be used for the exchange rates selection: the activity hourly reporting time or the approval of the hourly reporting time.
To further explain, this is specific to the Currency rates in a Multi-Currency environment. As currency rates change hourly, a Manager can report/approve the changes. This setting provides the ability to set the system use the timestamp based on Reported or Approved time. Since you are using Auto-Approve of Timesheets, this is irrelevant and so your system uses Approval Time Sheets. Hope this information helps.