diff --git a/src/init/AppRunner.ts b/src/init/AppRunner.ts
index 390acfefb..086c796dd 100644
--- a/src/init/AppRunner.ts
+++ b/src/init/AppRunner.ts
@@ -5,7 +5,7 @@ import type { IComponentsManagerBuilderOptions, LogLevel } from 'componentsjs';
 import { ComponentsManager } from 'componentsjs';
 import yargs from 'yargs';
 import { getLoggerFor } from '../logging/LogUtil';
-import { absoluteFilePath, ensureTrailingSlash, joinFilePath } from '../util/PathUtil';
+import { ensureTrailingSlash, resolveAssetPath } from '../util/PathUtil';
 import type { App } from './App';
 
 export interface CliParams {
@@ -85,11 +85,11 @@ export class AppRunner {
 
     // Gather settings for instantiating the server
     const loaderProperties: IComponentsManagerBuilderOptions<App> = {
-      mainModulePath: this.resolveFilePath(params.mainModulePath),
+      mainModulePath: resolveAssetPath(params.mainModulePath),
       dumpErrorState: true,
       logLevel: params.loggingLevel as LogLevel,
     };
-    const configFile = this.resolveFilePath(params.config, 'config/default.json');
+    const configFile = resolveAssetPath(params.config ?? '$PACKAGE_ROOT/config/default.json');
 
     // Create and execute the app
     this.createApp(loaderProperties, configFile, params)
@@ -141,22 +141,10 @@ export class AppRunner {
         params.baseUrl ? ensureTrailingSlash(params.baseUrl) : `http://localhost:${params.port}/`,
       'urn:solid-server:default:variable:loggingLevel': params.loggingLevel,
       'urn:solid-server:default:variable:port': params.port,
-      'urn:solid-server:default:variable:rootFilePath':
-        this.resolveFilePath(params.rootFilePath),
+      'urn:solid-server:default:variable:rootFilePath': resolveAssetPath(params.rootFilePath),
       'urn:solid-server:default:variable:sparqlEndpoint': params.sparqlEndpoint,
       'urn:solid-server:default:variable:showStackTrace': params.showStackTrace,
-      'urn:solid-server:default:variable:podConfigJson':
-        this.resolveFilePath(params.podConfigJson),
+      'urn:solid-server:default:variable:podConfigJson': resolveAssetPath(params.podConfigJson),
     };
   }
-
-  /**
-   * Resolves a path relative to the current working directory,
-   * falling back to a path relative to this module.
-   */
-  protected resolveFilePath(cwdPath?: string | null, modulePath = ''): string {
-    return typeof cwdPath === 'string' ?
-      absoluteFilePath(cwdPath) :
-      joinFilePath(__dirname, '../../', modulePath);
-  }
 }
diff --git a/src/util/PathUtil.ts b/src/util/PathUtil.ts
index ae8857cbc..c118769d5 100644
--- a/src/util/PathUtil.ts
+++ b/src/util/PathUtil.ts
@@ -173,13 +173,14 @@ export function getModuleRoot(): string {
   return joinFilePath(__dirname, '../../');
 }
 
+const modulePath = '$PACKAGE_ROOT/';
+
 /**
  * Converts file path inputs into absolute paths.
  * Works similar to `absoluteFilePath` but paths that start with '$PACKAGE_ROOT/'
  * will be relative to the module directory instead of the cwd.
  */
-export function resolveAssetPath(path: string): string {
-  const modulePath = '$PACKAGE_ROOT/';
+export function resolveAssetPath(path: string = modulePath): string {
   if (path.startsWith(modulePath)) {
     return joinFilePath(getModuleRoot(), path.slice(modulePath.length));
   }
diff --git a/test/unit/init/AppRunner.test.ts b/test/unit/init/AppRunner.test.ts
index 9d7f4b32c..4530914a7 100644
--- a/test/unit/init/AppRunner.test.ts
+++ b/test/unit/init/AppRunner.test.ts
@@ -207,6 +207,21 @@ describe('AppRunner', (): void => {
       );
     });
 
+    it('accepts asset paths for the config flag.', async(): Promise<void> => {
+      new AppRunner().runCli({
+        argv: [
+          'node', 'script',
+          '--config', '$PACKAGE_ROOT/config/file.json',
+        ],
+      });
+      await new Promise(setImmediate);
+
+      expect(manager.configRegistry.register).toHaveBeenCalledTimes(1);
+      expect(manager.configRegistry.register).toHaveBeenCalledWith(
+        joinFilePath(__dirname, '../../../config/file.json'),
+      );
+    });
+
     it('uses the default process.argv in case none are provided.', async(): Promise<void> => {
       const { argv } = process;
       process.argv = [