This is an excellent link:
http://spot.pcc.edu/~rsteele/BCT122_123/return_eave.pdf
They run the outside hip rafter back to the gable wall and don't run the barge rafter (rake board) to the fascia like I've shown, maybe I've got this wrong...
This method would allow for sheathing of the return without having to notch around the barge rafter. I call this the floating barge rafter method:
Compare with extending the barge rafter all the way to the fascia board:
http://spot.pcc.edu/~rsteele/BCT122_123/return_eave.pdf
They run the outside hip rafter back to the gable wall and don't run the barge rafter (rake board) to the fascia like I've shown, maybe I've got this wrong...
This method would allow for sheathing of the return without having to notch around the barge rafter. I call this the floating barge rafter method:
Compare with extending the barge rafter all the way to the fascia board: