You can find this toggle under Settings -> Portfolio & Tax section. Switching this toggle does not change the results of your reports. The choice of setting only impacts if the fiat holdings are shown. If you are unsure about this setting, it's advised to consult with your accountant or local tax professionals about your situation before submitting the reports.
When the toggle is switched on, all your fiat holdings are shown in reports and on the dashboard/portfolio.
When the toggle is switched off, all your fiat holdings are not shown in reports or on the dashboard/portfolio.