Reflectance anisotropy spectroscopy (RAS) has been used to monitor the formation and development of InAs islands grown onto GaAs(001) substrates by molecular beam epitaxy. Time resolved measurements show entirely different responses at different photon energies, corresponding to different aspects of the islanding process. At a photon energy of 2.6 eV RAS is sensitive to the onset of islanding, whereas the 4.0 eV signal appears to be sensitive to the continuous interisland wetting layer. Thus, by using the 4.0 eV signal it is possible to follow the real time development of the islanded surface. In particular, it is found that (1) during growth and immediately beyond the point of islanding, a fixed fraction of the incoming flux is directly transferred to the islands, and this fraction increases with increasing growth temperature up to 100%; (2) as a consequence of this, the wetting layer can increase in thickness beyond the 1.6 monolayers islanding thickness, to at least similar to 2 monolayers; (3) the importance;of islands acting as sinks for the acquisition of material from the wetting layer is revealed; (4) the dynamic equilibrium set up between the islands and the wetting layer is such that the thickness of the latter increases significantly with sample temperature.