Considering an expansion of a 70s house, I'm wondering what is standard in exterior wooden walls today.

Do you place the exterior gypsum so it aligns with the foundation elements and rests on the cement edge, or does it extend beyond with a free edge downwards? It seems most sensible to set the sill flush with the edge and just place the exterior gypsum + furring strip + panel outside. Is that how it should be done?
 
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