Most scientific papers refer to almost any formula that contains the "=" sign by the word "equation". Consider this case:
value = function(input) (1) where
input is a known input value and
value is the result of the
function computation. In this situation, there are no effective unknowns (we are guaranteed that no unknowns are hidden in the
function expression either).
Most papers (if not all) often refer to expression (1) in sentences like "equation (1) is equivalent to", "referring to equation (1), we see that..".
Some pedantic referees, however, suggest the use of a more proper word (e.g. formula (1) instead of equation (1)).
Is there a grammar reference that solves this seemingly insignificant issue?
An example of an expression not considered an equation by a referee: (a+b)^2 = a^2 + 2ab + b^2 (1).
I'd say your referee is right.
When you have variables on both sides of an equality, i.e. when you show some relationship between variables, we tend to say this is a formula.
E.g. x + 2y = 3z is a formula.
If, however, one of the sides of your equality contains no variables, just value(s), then we say it's an equation.
E.g. x + 2y = 3 is an equation.
Edit: The "equation" environment in LaTeX can be quite confusing this way, as it is often used for formulas, rather than equations...