Attosecond transient absorption spectroscopy of highly excited states allows investigating the dynamics of both the decay and the light induced coupling between excited states. We present a rigorous quantum mechanical treatment that provides a generalized discussion of the on- and off-resonant decay dynamics, of resonant and non-resonant couplings to either discrete or continua states and the temporal evolution of the quantum beating of the excited wavepackets. The comparison of the model to experimental results obtained in xenon proves its general applicability.