The parser inherit from the report_sxw.rml_parse object and it add to the localcontext, the function time so it will be possible to call it in the report.

After an instance of report_sxw.report_sxw is created with the parameters

1. the name of the report
2. the object name on which the report is defined
3. the path to the rml file
4. the parser to use for the report (by default rml_parse)
5. a boolean to add or not the company header on the report (default True)

report_sxw The second parameter is object name 'purchase.order' for Purchase Module

from openerp.report import report_sxw File Location server\server\openerp\report\report_sxw.py

As prakash suggested: See this for clarification.

order is a custom parser that inherits from report_sxw.rml_parse.
The __ini__ function is overridden to give access to the time via the localcontext.

From the given link above:

After, an instance of report_sxw.report_sxw is created with the parameters:
- the name of the report
- the object name on which the report is defined
- the path to the rml file
- the parser to use for the report (by default rml_parse)
- a boolean to add or not the company header on the report (default True)

If you check the code of report_sxw.report_sxw you will find the definition of its __init__ function:

class report_sxw(report_rml, preprocess.report):
def __init__(self, name, table, rml=False, parser=rml_parse, header='external', store=False):
    report_rml.__init__(self, name, table, rml, '')
    self.name = name
    self.parser = parser
    self.header = header
    self.store = store
    self.internal_header=False
    if header=='internal' or header=='internal landscape':
        self.internal_header=True

There you can see what the documentation already told you: The second argument is the table/model/object on which you create the report.
In your case 'purchase.order'. It has nothing to do with the name of the parser; this is the fourth argument.

Regards.